(You can read more of our original ideas in our archive. You can order a business plan of this idea here.)
Problem: Fundraising as a startup is extremely difficult: the space is convoluted and rewards those with a network, there are hidden “fundraising sins”, and because of lack of information available women and minorities only between 10%-11.5% of venture funding goes to teams with women (2.8% goes to all-female teams). Black founders receive <1% of venture capital dollars, as reported by the Harvard Business Review.
Solution: A pro-bono or low-cost consulting service that allows startups to hire a “fundraising consultant” who is an expert in VC fundraising (either because they’ve worked in VC, are an angel investor, or have raise their own successful round). Consultants would be compensated both in cash and in stock (perhaps 1%? or less) from the startups that they provide advice to.
This idea came to me while talking with a female founder who was asking me for advice on raising her round. “The process is an enigma,” she lamented, “I wish someone could help me.” We chat almost once a week as I give her my $0.02 about the process and about what she should be doing to increase her odds, based on my view from “the inside.” This business would go beyond mentorship to actually provide a service to startup founders through a gig-economy model. Primarily, the mission of the business would be to demystify and increase awareness about the fundraising process, all while providing a useful service.
The second problem that this solves (indirectly) is that it gives experts with skills the opportunity to practice their skills of being a board member or a board observer. This would allow people who are not accredited investors the opportunity to get on the cap table of a promising startup through providing sweat equity.
Monetization: Business owns a % of the businesses that use it. Otherwise, free. Perhaps small fees for the consultants to be on the platform based on their revenues.
Contributed by: Michael Bervell (Billion Dollar Startup Ideas)