5 Trends in Business Startups

When all the stars align, business startups can return big dividends to investors and can sometimes result in game changing technology. Business startups follow certain trends, often dictated by investors. Here?s a look at some of the current business startup trends.

Incubators

Business incubators are exactly as they sound. They provide the necessary infrastructure that can be so costly to companies which are trying to get off the ground, create a prototype, or prove a general concept to attract further funding. Incubators can also provide office space, business coaching, administrative support, and if prominent enough an entr?e into investors with a great deal of experience in many different business disciplines.

The number of business incubators ebbs and flows with each business cycle, but they are generally a decent indicator of the mindset of savvy, startup investors. When incubators make the business news on a regular basis, and every startup out there knows this can spell the difference between success and failure, that?s when assumptions can be made about the willingness of investors to back new ideas.

Currently, business incubators are a very hot trend in business startups, which is a clear sign that startup investors are anxious to back smart ideas, and in some instances jump starting business growth and development in the hope of creating a domino effect throughout the investment community.

Individual Investors

Perhaps fueled by the interest business incubators are showing in startup companies, individual investors are starting to reach back into their pockets to put their own cash on the barrelhead. In many instances today, individual investors are so anxious to do something?anything?with their money they?re even willing to invest in good ideas without a business plan as long as business intelligence or a unique product or service is demonstrated.

Of particular interest to individual investor are web companies and anything that has to do with mobile computing. While these types of technologies have always been popular with individual investors, the sour economy has sidelined many, leaving institutional investors to get these types of startups off the ground. Unfortunately, institutions don?t move with the same speed as individual investors, which has left many worthwhile startups unfunded or caused them to miss their windows of opportunity.

Startups, particularly in the tech sector, should market their ideas and business plans directly to individual investors.

Keep a Lean Budget

When starting up any new company, it?s critically important to have a handle on all things financial. The last thing any investor wants to discover is that a large percentage of their investment is going to cover salaries and only a small part is actually going into the company. This is a sure sign that those looking for financing are looking for a big payday and aren?t vested in creating a lasting, profitable company.

Don?t be shortsighted when it comes to the potential of your new business. The last thing you want to do is use all your investment money on salaries, toys, and bonuses, only to wind up running your startup into the ground, or worse, losing control of it. Every good business owner who has any faith at all in his company?s future will sacrifice the short money today?as enticing as it might be?for a relative fortune in the future.

Today?s investors, when they do seek a business plan, want to see a strict ?use of proceeds?. They also want to see conservative salaries, and in exchange don?t mind at all seeing that offset in stock and stock options. After all, if, as a business owner, you?re not willing to invest in the upside of your company by taking a lot of your compensation in stock, then why should they take all of theirs in that form? Something worth serious consideration as you?re writing your next business plan.

Using the Internet

Unlike other times in our country?s history, technology is seemingly all things to all people, and it touches nearly every aspect of our lives. To not take advantage of modern technology, and specifically the Internet, is to sell short your opportunity to reach the broadest audience possible.

Worse that missing out on the chance to share your story with a broad audience is the impression you may leave with potential investors. If your company isn?t seen as tech savvy, it can draw into question your ability to effectively operate your business in a connected world, and to take advantage of the myriad ways to expose your company?s products and services in all the ways people look for them today.

Using the Internet includes marketing your investment opportunity through social media outlets like Facebook and Twitter, creating an interactive website and/or blog, and creating YouTube videos to share anything from your products and services, the details of your business plan, the office building you?d like to inhabit, and even introducing your management team.

You must use the tools at your disposal today, and the startups attracting serious investors today are taking advantage of everything available to them.

Investor Road Shows

How far are you willing to go to promote your new startup? Many entrepreneurs today are combining efforts with investor relations firms and other U.S. market consultants to bring their particular business vision and investment opportunity to live audiences filled with individual investors.

Known as investor road shows, more and more startup entrepreneurs are traveling the country, and sometimes the world, to present their new business idea to a wide range of investors, city after city, state after state. The ability to have face-to-face conversations with prospective investors can have a major payoff. Suddenly, you?re no longer an idea or concept, but a real person who can answer real questions in real time.

This is the level of commitment some investors seek in entrepreneurs looking for risky startup money, and if you have any ability at all to hit the road to speak directly to investors, do it. The results could impress even you.

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About the Author

This guest post is by Edwin, a writer and content specialist for USDish.com.

Source: http://www.informationgateway.org/5-trends-business-startups/

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