By Marty Aquino
08 MAR 12
AdVenture Capital is the art of raising the right amount of capital and administering it at the right time. Sounds easy, right? Isn’t the right capital anything equal to or greater than the amount you specified in your business plan? The answer surprisingly is not exactly.
Ready for some sobering business facts? Here are some surprising facts about startup companies:
Fact One: Small business failure rates have increased by 40% from 2007 to 2010*
Fact Two: The failure rate for startups where all assets are lost and investors lose most or all the money they put into the company is 30 to 40 percent**
Fact Three: If failure refers to failing to see the projected return on investment, then the failure rate is 70 to 80 percent**
Fact Four: The predominant cause of big failures versus small failures is too much funding**
Fact Five: Too much funding for an unstable business model can take what would have been a small failure and turn it into a huge one**
“Most startups fail due to lack of foresight, lack of wiggle room in the business plan, bad timing, or lack of funding,” according to Harvard Business School professor Shikhar Gosh. And, you know what? He’s right. The aforementioned facts are a testament to it.
The phrase “AdVenture Capital” was coined by expert startup consultant Will Watson of Transcendent Advisors Group. The phrase embodies what entrepreneurs and investors alike go through when building a startup company. The act of believing in your idea so much that you think it should be justified with tens of millions of dollars –of other people’s money, is indeed a wild adventure.
Carbonwolf Energy “CWE” has developed a proprietary method of funding well-qualified projects and companies that mitigates much of the risk for investors while preserving ownership control for the project developers. We achieve this effect by orchestrating the proper amounts of funding from varying types of capital. In this way, CWE creates a double “win” situation. In addition to added investment security, associated investors get their preferred type of investment (e.g. wind-energy, all-electric vehicle, waste-to-energy, etc.) and project developers, in turn, get the right amount of capital to become World Changers and deny the all-too-common business failure trends mentioned above.
The Right Amount
Is there are a right amount of capital for your project? The startup and capital data would strongly suggest that the answer is absolutely yes - especially when it comes to using outside funding. How do you know what the right amount is? Carbonwolf Energy and its partners look for a number of key factors within each project and compare them to several benchmarks. For example, one benchmark could be the relationship quality of the project's offtakers or buyers. Results like these allow us to eventually generate an amount-range that is generally higher than what the well-qualified project originally anticipated.
At the Right Time
One of the hardest concepts to understand in the capital-raising-game is timing. Leonardo da Vinci is credited with being the first creator of the robot (mechanical not electronic). His robot, clad in German-Italian medieval armor could sit, stand, raise its visor, maneuver its arms independently and was a "hit" with Italian nobility at parties. However, he invented it in 1495 - way ahead of its time. It would be over 450 years later where robots would find commercially-viable and practical uses. The key then to coupling innovative projects and investment capital is to assess the timing. Is it too early to deploy this project? Conversely, is it too late? Carbonwolf Energy and its partners use available data to forecast the disruption, both good and bad to help make this assessment. This timing component can substantially add to the overall success of your project.
Carbonwolf Energy's AdVenture Capital methodology can get World Changers the right capital at the right time. Do you think your project has what it takes? Visit our Funding Solutions Page. Or, Contact Us.
Alternatively, are you an investor who wants to know more about how we seriously mitigate your risk? Contact Us.
- *“Dun & Bradstreet”; The State of Small Businesses Post Great Recession; May 2011
- **“Harvard Business School”; Why Companies Fail—and How…; Carmen Nobel; March 2011