How did Guy secure funding?

Guy Raz, the NPR correspondent and podcaster, has shared various examples of how entrepreneurs secured funding through his show How I Built This. Here are some key strategies highlighted by different founders:

1. Bootstrapping and Selling a Stake:

   • Suroosh Alvi of Vice Media recounted how they bootstrapped the company initially by selling copies based on sales and advertising. Eventually, in 1998, they sold 25% of the company to an investor named Richard Salwinsky, which provided the capital needed to scale the magazine and move to New York 1.

2. Crowdfunding and SBA Loans:

   • Lindsey Boyd of The Laundress spoke about organizing a for-profit party called "soap splash" to raise initial funds before securing a Small Business Administration (SBA) loan of $100,000. They leveraged their good credit and 401ks to secure this loan 2.

3. Personal Reputation:

   • Mariam Naficy of Minted highlighted the importance of personal reputation. Despite the company losing money, a venture capital firm took a chance based on her previous success. She indicated that convincing investors depended significantly on her personal track record 3.

     Vice's Early Investment

     Guy Raz

     Suroosh Alvi

     Suroosh and Shane's bold move to sell a quarter of their company to an unexpected investor in Montreal kickstarted Vice's growth, leading to a pivotal move to New York with newfound capital.

     

     How I Built This

     VICE: Suroosh Alvi

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4. Angel Investors:

   • Jennifer Fitzgerald of Policygenius managed to secure $735,000 from angel investors after facing repeated rejection from venture capital firms. She raised this fund from around 50 investors, mainly friends, family, and McKinsey partners 4.

5. Persistence and Preparation:

   • Alexa Von Tobel of LearnVest emphasized the importance of thorough preparation and persistence. Despite economic challenges, she was able to convince an investor by demonstrating her commitment with a comprehensive business plan and persistent follow-up 5.

These insights underscore that securing funding often requires a mix of creativity, leveraging personal networks, solid preparation, and persistence in the face of rejections.