Sources of Funding
When starting a brand new start-up the traditional sources of funding are self funding, family money and bank loans. Rarely does a brand new start-up get outside investors involved. When a brand is doing enough business to attract investments then these sources can include venture capital, business incubators and accelerators, government grants and angel investors.
What is the difference between Venture Capital and Angel Investors?
Venture Capital: A venture capitalist is a person or firm that invests in small companies, generally using money pooled from investment companies, large corporations, and pension funds. Typically, VCs do not use their own money to invest in companies.
Angel Investors: An angel investor is an accredited investor who uses their own money to invest in small businesses. They are required to have a minimum net worth of $1 million and an annual income of at least $200,000 to be considered an accredited investor. Many angel investors are small business owners’ family and friends.
Summary: Typically, VCs do not use their own money to invest in companies. An angel investor is an accredited investor who uses their own money to invest in small businesses.
The Lemonaders Team has a number of funding partners who are available for discussions with client brands. Angel investors are a vital link for the success of a food, beverage and/or snack start-up. Angel Investors are also mentors and board members to a number of companies as well. We are creating our own fund that will be helping the development of brands launching in 2020.
We are media partners with the American Capital Association which is a vital link for angel investors nationwide. The North American professional association of active accredited investors provides unparalleled access to trending ideas and professional knowledge to help improve returns and promote effective public policies for angels and startups. Although not a funding source, ACA provides entrepreneurs an inside view into how angels think.
The American Angel Campaign
ACA Study: Every year 200,000+ American angels invest an estimated $25B in more than 71,000 startup deals. Although angels have powerful impact, little else is known about these high-net worth individuals. This first-ever study will define the American Angel today.
Jointly launched by the Angel Capital Association and Wharton Entrepreneurship, this ground-breaking campaign benchmarks the mix of angel investors across America by age, gender, ethnicity and pinpoint any commonalities such as the path that got them there or how they discover and fund early-stage companies. The 2017 results confirm some assumptions, but include many surprises.
Food Incubation Programs
There is a major trend for traditional business incubators creating new food company incubation programs. In past years only about 2-3% of incubators (from the 7,000 that exist worldwide) have a program dedicated to food start-ups. Innovation.biz was created to be a resource for business incubators that either have a current food program or those that want to create one.
Potential clients and partners include: