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Negotiating Startup Capital Financing

business_capitalIf you have ever required capital for your start-up company, you may have an idea of the value of your company when going to the deal table. It is highly likely that there is a deviation between what your valuation is and what the investor’s valuation is at the onset. In order to close this gap, you should be familiar with how to negotiate a lower cost of capital and higher valuation for your company. In many cases, companies are fearful that appearing greedy will push investors away and they will be without any money whatsoever. However, this is rarely the case and the valuation is negotiable like many other things that are for sale.

Therefore, this article provides insight on how to effectively negotiate startup capital financing in a way that is effective and will not draw back investors from the deal table. In some cases, you can potentially risk the overall investment if you fail to follow a structured procedure and remain calculated in your responses and proposal. Therefore, we encourage you to analyze and adopt the following techniques:

Build a Logical Argument

You may be astonished to learn how frequently capital discussions turn emotion or are based on illogical arguments that have nothing to do with value. For instance, arguing how much money you have invested or time spent building the technology really means very little. Instead, focusing on the brand recognition in your early stage or competitive advantage strength can boost the value. In fact, getting emotional or personal about the effort can draw investors away from the investment opportunity. Being emotional may come across as being attached and lacking the ability to think in an unbiased manner about the company’s exit strategy, which is a purely financial decision for investors.

Show the Value Quantitatively

The most effective method of building a strong investment case is to demonstrate the value of the company through the financial model. If the revenue projections are reasonable and conservative, they are more likely to be taken seriously by investors. This means using accurate market research as the basis of the assumptions and being able to adequately explain all of the drivers that went into forming them. For instance, your pricing strategy having been demonstrated in the market through tangible sales or validated in a focus group.

Receive More than One Offer

Nobody likes to feel like they are the only one interested in something. The simple law of supply and demand will always work in your favor if you can get more than one investor interested in your company. This will not only increase your negotiation power, but also build a stronger safety net that grants you more power at the deal table by increasing your leverage. As you receive more offers, investors may also be interested in a co-investment relationship. Under such an arrangement, multiple investors will enter a deal together and reduce one another’s risk. This not only means a potentially higher valuation, but doubles the resources that you have access to from investment acquisition.

Understand the Screening Process

Understanding how investors analyze your company can be advantageous when you are soliciting for these offers. Investors will analyze both the quantitative factors and qualitative factors that will influence your company’s risk and impact your bottom-line. One of the most important points for any investor is what your competitive advantage is and what market problem that you are addressing.

Even if your company does manage to solve a problem in the market, the question then becomes how you are able to sustain your competitive edge in the market. It is extremely likely that investors will compete against you for market share and you must be able to effectively outperform them in a manner that they cannot easily replicate.

We hope that this article has provided you with quality information about how investors analyze your business and the method of leveraging that knowledge to arrive at a higher valuation. We have seen many companies agree to a lower valuation due to the inability of companies to negotiate their valuation.


How to save money on your holidays

Now in the midst of the festive period, the majority of families are settling down for Christmas at home. In contrast, a growing number of families are looking to spend the festive period abroad, as they aim to capture some winter sun and enjoy a unique holiday experience. Interestingly, consumers also use the winter period to research and book trips for the following summer, in a bid to save money and take the stress out of planning international trips. Either way, Christmas is a busy time for sun-seekers and those in search of overseas trips.

3 Ways in which you can save money on your Holiday

While the ways in which you can save money on your holiday depend largely on the nature of your trip and destination, we have identified three ways to save money at every stage of the experience. For example: –

  1. Access flash sales to save money on Holiday essentials

If you are familiar with flash mobs, you will know how brands use spontaneous and interactive marketing tools to promote their products (or services). We have also seen a similar concept impact on the world of sales recently, through which brands collaborate to offer goods at hugely discounted prices for a limited period only. These deals are usually shared online, where discount vendors such as LivingSocial, EveryDayOffers and Groupon collate the best offers and publish these on a first come, first served basis. This can be an excellent way to save money on holiday essentials!holiday4

  1. Book your Flights and Hotel with Strategic timing

Timing is everything, especially in the race to save money as a consumer. As a holiday-goer, flights and accommodation will usually represent the highest costs, and booking these at strategic times can help you to save money. Once you have picked a destination and estimated date of travel, research exactly when you can expect flights to be released as this is usually when they can be sourced for less. In terms of hotel rooms, either book six months in advance or between two to four weeks prior to leaving, while it is also important that you identify resources such as LastMinute.com as they list secret hotels and the best real-time deals.

  1. Consider specialist breakdown coverage for road trips

While road-trips can be exceptionally fun and are a great way to see the world, they also bring huge logistical and financial challenges. Insurance requirements change from country to country, for example, meaning that a simple breakdown overseas can trigger huge costs and scupper your holiday before it has even begun. It is therefore that you invest in relevant and comprehensive breakdown coverage that protects your overseas, with service providers such as Start Rescue offering an in-depth European policy to its customers.

Image credit: http://www.moneycrashers.com/create-holiday-budget/


Are you over-spending this holiday?

The “stock” advice for the upcoming holidays is not to overspend. Everyone knows that. You know that. The financial experts know that. And people who overspend know that as well. Now, the question is- with item prices skyrocketing everyday how do you ensure that you’re not blowing your budget on the smallest of items? Here are a few tips to check your holiday spending in 2015.

How to check your spending this holiday?

Let us start off by saying that you necessarily don’t have to turn to an Economics book in order to dig out essential financial tips. Look around and you can actually recognize avenues of saving from even the smallest of items. For instance, why cough up $100 for gift bags? Rack your cupboards and drawers in order to find old gift bags. Recycle gift bags and ribbons instead of purchasing new ones. Here are a few other tips to save up more in the upcoming holidays.shutterstock_223147579

Stop depending on your credit cards

You are stacking most of your expenses on your credit cards simply because you don’t have the money to buy these items. Not a prudent move. Let start off the New Year on a really different note. Why not assure yourself some peace of mind this holiday? How about ditching those credit card bills? In fact, studies have shown that buyers spend much more when they are buying with credit cards than what they do when they are not using these cards.

Take your time

Don’t be in a rush to get your hands on everything that you come across in a flash sale. Herd mentality remains one of the major reasons why people end up buying much more than they had intended to do initially. And, you necessarily don’t have to be accompanied by your friends in order to “succumb to over-buying”. You can just see people around you jumping on stuff and you can jolly well follow suit as well. It happens even when you are buying online. Checking out deals after a hectic day at work- when you’re all exhausted does not make you immune from imprudence as well. The key is to wait and watch your deals properly and then buy—doesn’t matter if you’re shopping offline or online.

Make a list of people who you need to buy gifts for

Yes, you cannot really keep hopping (in your mind) from one friend to another relative in the shop. “Oh! I have taken a gift for Martha but what will her half sister think if I don’t gift her anything?” What if you have already spent a huge amount of money on Martha’s gift? Lack of planning often gives way to more spending. It is very important to ensure that you are actually making a list of the people for whom you want to buy gifts. It helps you spend your money evenly or at least prioritize. Take time to make this list. Don’t rush through it.

Do watch out for deals and discounts and invest proper time in comparing these deals. However, do not be too late in reaching a decision.


US Fed Rate – A Persisting Dilemma

dollar_1999092bFinancial pundits have been forecasting US Fed rate hike for quite sometime now. However, many internal and external factors have resisted the Federal Reserve from hiking it from the persisting 0.250 per cent. Though the market expected the fed rate to increase in September 2015, it didn’t because the central bank was worried about derailment of resurging U.S. growth due to instability in Chinese economy and economic slowdown. If the minutes of September 16-17 discussions by the board members of Federal Reserve are taken seriously, it might take 9 years to increase the concerned rate.

Why US Fed failed to increase Fed Rate in September 2015?

One of the reasons that restricted board of Federal Reserve from increasing Fed Rate in September 2015 is the dismal job growth data. Per official figures, in September 2015 just 142,000 jobs were added, which is 64,000 jobs lesser than analysts’ expectation. Another figure published by US Labor Department is the “zero” rise in average pay. More alarming is the fact that thousands of workers left their jobs and the participation rate of workers fell to a dismal low, last seen in 1970s. In fact, slow down in Chinese economy also held the board back from increase interest rate.

To top it, US Consumer prices fell by 0.2 per cent during September. In fact, inflation rate has been steadily falling since May 2015, signaling persistent sluggish pace of inflation. This persistent fall is exactly opposite of Fed’s stated target of 2 per cent. All these phenomenon including slowing economy of China, falling inflation (both globally as well as domestically), and market disruptions are again making it difficult for Federal Reserve to increase the interest rate, which is stuck to the current near-zero level (0.25 per cent) since 2008 (the year US economy was in deep recession).

What analysts are Predicting about Fed Rate Hike?

On the expectation of US Fed holding interest rate hike till 2015-end, gold buying is witnessing rally since mid-September. Strength of dollar is also weakening. US Dollar has fallen significantly with respect to other currencies such as Euro in the recent past. Last week, Euro was up against US Dollar by 2.3 per cent, which is a striking phenomenon as Euro fell sharply in the past touching a 12 years low earlier in 2015. These phenomenons gave overall market all the reasons to park its money in the yellow metal for hedging risk.

Colin Hamilton, head of commodities research at Macquarie, said that they conducted a poll in their base metals summit survey earlier this week and found out that most of the audience is expecting a Fed rate hike only after December 2015.

Gold_industryJessica Fung, analyst of metals and mining at BMO Capital Markets, said during a press meet that overall market is currently expecting Fed rate hike around March 2016. She went on to explain that expectation of US Dollar drive gold price and pricing of the futures market is indicating towards a steeper gold price rise in latter part of the year. The momentum of gold price hike is expected to go on along 2016. Along with this increase in price of yellow metal, interest rate increase is expected to be during March 2016.

 

Ref: http://www.global-rates.com/interest-rates/central-banks/central-bank-america/fed-interest-rate.aspx

http://www.reuters.com/article/2015/10/15/us-ecb-fed-idUSKCN0S906320151015

http://www.cbc.ca/news/business/fed-minutes-september-1.3263358

http://www.theguardian.com/business/2015/oct/02/us-economy-adds-only-142000-jobs-raising-doubts-about-interest-rate-rise

http://www.investordaily.com.au/markets/38362-fed-rate-hike-good-for-economy

http://www.cnbc.com/2015/10/15/gold-price-move-points-to-fed-rate-hike-in-2016.html

http://www.wsj.com/articles/u-s-consumer-prices-fall-0-2-in-september-1444912347

http://www.cnbc.com/2015/10/21/is-the-us-headed-for-negative-interest-rates-commentary.html

http://www.forbes.com/sites/samanthasharf/2015/10/21/ben-bernanke-fed-rate-hike-is-a-risk-management-decision/


Save Money by Switching From Owning to Leasing Your Car

Unless you’re already a millionaire or have very expensive hobbies, aside from purchasing property buying a car is likely to be the biggest expense you ever have to make. Much like with property, most people aim to own their own home and car for good rather than rent.

This isn’t always the cheapest method of running a vehicle though. If you already own your own car then selling it and switching to leaseinstead can free up a significant amount of cash. Or if you’re yet to buy then consider leasing a top quality car first as a financially sound option.

Improved Cash Flow

Lower monthly payments are included for leasing a car against taking out a loan to buy one. Depending on how long you intend to keep the same car if you’ve bought one outright too, the lease payments can work out cheaper over time (especially considering depreciation).2014090417082720140826172721leasing-a-car

For those who can budget better on a monthly basis or need more access to cash each month then leasing is the best choice. Many dealers are up for negotiating too so you can secure a cheaper down payment and thus pay less on sales tax.

Reliable New Vehicle

The main advantage for many opting to lease vehicles is that it provides access to some of the best new cars otherwise out of their price range. As new models these are usually far more reliable to run, requiring less expenditure on maintenance and servicing.

The majority of new cars on the market these days also feature far more efficient fuel usage, which can be the biggest expense besides initial purchase. When the lease is up you can also upgrade to a newer model with even better eco-credentials or even switch to an electric or hybrid model to really cut back on fuel costs.

Substantial Cover

Many leasing deals incorporate maintenance costs into their policies which means you never have to arrange or pay for servicing and work on your vehicle. This means you’ll never have to pay anything else on top besides for fuel.

In the long run this can work out a lot cheaper as owning an older vehicle is more likely to require expensive repairs and find faults during its annual MOT. Even if your leased car is hit with some big damage your lasing rate should stay the same. Consider making the switch to reduce your monthly costs and improve the vehicle you drive.

Image source: http://www.unileasing.az/


Saving on Technology

Our dependence on technology creates the illusion that we always need the newest, shiniest, and most expensive new toy. Unfortunately, this is many times a fallacy. Many of these new products that we line up around the corner for, are just as useful as other products that can be obtained for cheaper prices. In addition, the technology we buy can have a profound effect on the services that we use to power our devices. Here are some ways that you can save on the technology you need, while maximizing your ability to enjoy them.

Saving on Technology:

One obvious way to save on technology, is to understand what you’re buying and why you’re buying it. Just because a product is expensive doesn’t mean that is the one you need, many times the expense of a product is driven by the market, and by bells and whistles meant to make you believe you can’t live without it. By understanding your needs, you can avoid spending money on useless features that you’ll never be able to fully enjoy. For instance, if you don’t take a lot of pictures, you really don’t need the smartphone with advanced picture taking and editing abilities.

images2Televisions, provide us endless entertainment, but buying a television for the wrong reasons can leave your wallet in a world of hurt. It can be fun to learn and talk about all the new features, but the truth is many television manufacturers have televisions with the same specifications for lower prices. It is possible to get the same features for less money, as long as you’re willing to shop around a little bit. Additionally, these products can cost just as much to fix, as it is to buy a new one. By getting a good deal, you can save money for when you’ll need a new TV again.

Many people, especially new college students, experience the need to get a top of the line laptop that will last them all throughout college. However, the life of a computer is much more predicated on how well you treat your device. Frequent virus scans and maintenance will help extend the life of your computer, and keep it running smoother. The longer you have it, the more money you’ll save.

Possibly the most prominent place we see technology users flock to the newest, most expensive is in the world of smartphones. “The next big thing” is a phrase heard in many smartphone advertisements, but many times this next big thing, is really a small feature in the grand scheme of things. For example, a smartphone that displays information on the edges of the phone. Do you really need that? Is it really that difficult to pick up your phone and look at the screen? Many would argue no, and that’s why they are saving money on their smartphones.

How this Affects Service Providers:

The more money that is spent on the actual devices, the less money is left over to pay for the service that is needed to use it. An expensive TV means less channels you’re able to afford, expensive laptops inhibit your ability to add extra software that you’ll need, like Microsoft office. Too much money spent on smartphones could decrease the amount of data you’re able to buy on your service plan, which would defeat the purpose of spending that much on a phone.

This can also work the opposite way, if you decide that the expensive technology is the best for your lifestyle, then purchasing cheaper services will save you money for technology. For example, the programming DirecTV Los Angeles offers can both help you save money for technology, and cut down on money spent on service providers. This allows for TV users to get the most out of their devices, as well as their TV service; helping to be more entertained and overall happier with their customer experience.

Knowing what you personally need out of your technology, as well as what you’ll need to power your device can help save money, and ultimately get the most out of the technology that you spend hard earned money on. Additionally, it’s always a good idea to conduct thorough research of any product or type of product before purchasing, as prices can vary from place to place, and device to device. Spending all your money on expensive, shiny new gadgets limits your ability to pay for their service. What’s the point of great technology, without great service?

The best advice when it comes to buying technology, is to not get caught up in advertisements. Of course you think you need it, that’s the whole reason they say what they say. However, through your own research you can weed out, what you need and what you don’t.


The Best Ways for Families to Save Money Over the Summer

Saving money has become a priority for most families, regardless of their current income. Everyone wants to see their dollar stretch further and be able to do more together as a family without working so hard for it.

During the summer, it is especially difficult for families to save money. Everyone wants to go on vacation and do all of the fun activities that summer offer them, but each of those things can be expensive. Here are some of the best ways for families to save money over the summer.

Switch up the services

It is common for families to use different home services in the summer than they did in the winter. For example, some families might use the internet more than their phone service. Every family can decide which services are less needed and use Cox Cable to adjust accordingly.

Stop driving

When a family wants to head to their local park in the summer, they usually hop into the car and drive there. These daily trips can add up quickly, so to save money on gas, try walking or biking there instead.

The Best Ways for Families to Save Money Over the SummerLook at other summer camp options

Summer camps are something that every child looks forward to in the summer, but camps can be very expensive. Parents and kids can look into new options that might provide kids with the same experiences, but be much less expensive, like public-run camps.

Take advantage of local attractions

Every city will have their own share of local attractions that many of the locals will simply overlook. Take time to give all of these events a chance this summer.

Make some fun in the backyard

Instead of paying too much money for a waterpark pass, try making one in the backyard. This can be simple for any family with some space, a tarp and a hose. This can be an even safer and more fun event for the kids than any theme park or attractions.

Plan ahead

Last-minute vacations are very common in the summer months. Many families will wait until they feel ready to plan their vacations, but this usually means the prices have gone up. Plan in advance to get the lowest rates.

Cook at home

Going out to eat can be a big expense for any family. In the summer, there is so much more great produce available at local farmers markets and grocery stores than there was in the winter, so families should take advantage of that and cook some elaborate meals at home. Host a family cook out to enjoy the warm weather while saving money on dining out.

Search everywhere for new deals

There are always new deals, coupons and offers coming up online. Families can take the time to search a few reliable sites to find the best deals for entertainment in their area, everything from swimming pool passes to concert tickets. This is a simple way for families to make the most of their summer.

Image: http://pixabay.com/en/water-fight-children-water-play-442257/


Top Tips for Cost-Effective City Motoring

Driving in a city can be an expensive business. The amount of time spent sat in traffic can push your fuel bills through the roof and put a lot of wear and tear on parts of your car’s engine. The simple truth of the matter is that cars are designed to move and city motoring, as a result, can be rather expensive. There are some great ways to cut the costs, though.

Choose your car carefully

Generally speaking, if you do a lot of city driving you’ll want to be in a smaller, more efficient car. Smaller cars are usually cheaper to tax and insure, too, with models such as the Fiat 500, Alfa Romeo MiTo and Nissan Micra being designed for city use.

Embrace new motoring technology

Idling in traffic is possibly the worst state for a car to be in. Some new models of car, such as the Hyundai i30, will switch between idling or cutting out the engine in traffic depending on which would be the most fuel-efficient at that particular moment in time. This can save you a lot of money in the long run.

Get your car serviced regularlycity-593145_1280-fbe1fe-840x550

This might seem counter-productive, being asked to spend money to save money, but keeping a close eye on your car is particularly important when you make only short journeys or do a lot of city motoring, as this can be particularly stressful on the parts. Keeping a close eye on it will ensure that you’re not suddenly hit with expensive repair bills.

Have a close look at the MPG figures

When you’re buying a new car, don’t just look at the combined MPG figure as that includes motorway driving, which is generally very fuel efficient and will artificially inflate the overall figure. If you mainly do city driving, you’ll want to look at the urban MPG figure and delve a little deeper to see how it really performs with the usage you’ll be giving it.

Put simply, city motoring is different from other forms of motoring and as such you will need to look at your car in a different light. Using the tips above, you’ll be able to save cash and low your outlay on what is otherwise, generally speaking, a very expensive form of motoring.

Image Credit: https://urbantimes.co/2015/01/6-car-technologies-that-are-changing-motoring-safety-for-the-better/


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