If you are confident that you want to carry this venture forward, it’s a good idea to incorporate as soon as you can. Incorporating separates your personal assets from your business assets, and gives you limited liability. For nonprofits, you have to incorporate (and register with the IRS) if you want to take tax-deductible donations. However, incorporation does cost money (anywhere from $200-$1200 depending on the state and type of venture you incorporate), and if you opt for a C-Corporation, you’ll have to start paying taxes (even if you are pre-revenue). You will definitely need to be incorporated before you take any external funding or enter into contracts with other businesses or individuals. When incorporating, the big decisions include: what type of entity to incorporate as, what state to incorporate in, and the details within your Operating Agreement or Bylaws.
Validation and Traction are both two very important, interrelated concepts for idea-stage venture, and many people use them interchangeably despite their differences. Validation is proof that people want or need your idea: it can come from observing problems, talking to potential customers/users, or getting testimonials. But even though people say they want something doesn’t mean they will pay to have it - that’s where traction comes in. Traction is proof that people want and are willing to pay for your idea - typically in the form of users on a platform, revenue, other investors lined up, or letters of intent from key stakeholders. Think of Traction as “objective Validation”.
Most ideas lack what we call Validation, or proof that there are people who want - and can financially support - the idea. So many idea-stage resources, like incubators or mentorship programs, focus on helping you get validation. The best way to get validation is by talking to users and building a Minimum-Viable-Product (MVP) that showcases the most basic essence of what your venture does. So look for resources that help you either meet customers, build an MVP, or connect you to experts in your industry.
The most honest answer to this question is also the most useless: you need funding when you need it! There is no good answer to this question, because it wholly depends on the founding team's financial circumstances. You might not have personal capital to contribute to your venture, and that's okay! But all forms of external capital come with tradeoffs (even grants, you will spend many hours writing them!) so it's a good idea that you make as much possible progress on your venture that you can before seeking capital.
That really depends on which makerspace you go to and what industries they focus on. For hardware-focused makerspaces, they might have soldering equipment and circuit boards to make electronics. Some may have sewing machines or leather-punches for fashion, while others might have or CNC machines for metal, saws for wood, or 3-D printers for prototyping. The makerspaces website will typically detail which equipment they have, and what training is required to use the machines.
Media Sources include things like online publications, blogs, newsletters, or other sites that are salient to entrepreneurs in Baltimore. We don’t algorithmically gather information about media sources, but when our team comes across something interesting, we list it here. Note like with all other Resources, we only list media sources that are hyper-local. If you think we missed an awesome media source that is salient to entrepreneurs, please submit it!
When building a startup, small business, or nonprofit, it’s important that you get plugged in to your local innovation community. You’ll meet other entrepreneurs, mentors, and even investors more quickly. If you’re just getting started, try attending some local innovation events, or joining a meetup group. Add your public profile and venture info on your profile so that other users on EcoMap Baltimore can support you! Finally, look for Incubator programs - these will help get you plugged into the ecosystem quickly.
Whether or not makerspaces can help you with production (not just prototyping) typically depends how many items you need to make. If you make hand-crafted leather custom purses for celebrities one week at a time, that’s very different than needing 500 purses ready to be shipped to JCPenny. Some makerspaces have restrictions around how often you can use the shared machines, so if you are getting ready to start producing many units, be sure to check with the managers first. Since they typically work with product-based businesses, the managers may also have some suggestions for where you can find production-scale equipment.
The number 1 reason that companies fail is because they build something that nobody wants. The best way to ensure you avoid this fate is to get out of the room and talk to people about your idea. This process of customer discovery helps you understand the exact needs of the people you are trying to serve, and will help you uncover whether or not they would pay to have those problems solved. Try to talk to at least 30 people about your idea, and iterate your model based on their feedback.
Databases are essentially other online datasets that accumulate information about things that entrepreneurs might care about, such as local businesses, cybersecurity companies, open properties, or other assets. We don’t scrape information from these databases (wouldn’t be kind to them), so instead we provide you direct links to those datasets
Most meetups are absolutely free and more than anything their priority is to meet like minded people. On a rare occasion a group might do a fundraiser or ask for a $5 dollar membership fee, this can sometimes help establish people that are a little more committed to the group. For Professional Associations, typically there is a pretty hefty membership fee, but sometimes you can go to a meeting for free to see if you like it. For Networking groups, there also tends to be a membership fee, but sometimes it is flexible or only based on the specific events you go to.
Some makerspaces have fees for membership or one time used, some makerspaces are free and have community items for everyone to share, while other makerspaces are only for students at a specific university. Typically, paid makerspaces will have different plans based on how often you plan to use the space and how much space you will need. Additionally, some makerspaces require you to pay for training on the machines. Make sure to check ahead of time, and if the prices are prohibitive, check to see if they have any scholarship opportunities for entrepreneurs
Mentoring can be topic specific or based on your personal needs. Peer Mentors tend to be someone your own age, so you’re going through the fire together. Experience Mentors may be someone older, perhaps they’re in the spot you wish to be 5 years from now and can give you some helpful tips. Topic Area Mentors are experts in a specific topic, like fundraising, or in a specific industry, like healthcare, and they can show you the ropes. Pro-bono advice is also considered a type of mentorship, such as pro-bono legal or accounting advice, which will come in handy for most startups
Typically, early-stage ventures are incorporated as a legal entity, whether that’s a nonprofit, corporation, or LLC, or are preparing to incorporate. Early-stage ventures have some type of traction in the market, and are likely serving initial customers or users. The team has expanded beyond the founders to include a few core team members. Not all early-stage ventures will have revenue (which largely depends on the type of venture you’re building), but they have already tested out the validity of the venture and are now looking for resources to scale their operations.
Congrats! If you are certain there are people who want your product and service and are willing to pay for it, you’ve made it further than most startup ventures. But now that you’ve proven market need, you need to prove that the need translates into dollars. For nonprofits, this will likely come in the form of initial grant funding. But for for-profit companies, you’ll need to start going after revenue. The best way to do this is to build your initial Minimum Viable Product (MVP), and sell that to some Early Adopters, aka customers who are willing to try out new products and services. Of course, if you’re building a medical device or other capital-intensive product, it won’t be feasible to go after revenue. In this case, doing extensive market research & customer discovery and gathering a handful of Letters of Intent from key stakeholders will serve you well.
First off, let’s get on the same page - you only need to worry about splitting Equity if you have a Corporation (LLCs don’t have equity, they have different classes of members). If you have a corporation, when it comes time to raise funding, you’ll need to have the equity split between cofounders sorted out. There’s no magical formula for doing this, but there are a few approaches: the 50/50 or 49/51 split is fine when partners bring equal skills and dedication to the venture. If one partner dedicates a lot more time or brings more advanced skills to the venture, then they may get a larger majority stake. There are a few online calculators that you can use to get potential breakdowns, but what matters most is that the cofounders agree on the splits and that you get this down in writing with a Founder’s Agreement so that there are no disputes down the line, when the equity actually translates into real money.
If you can’t find a group that matches your needs and interests, you can consider starting a new one! With a few clicks you can start a meetup group or create an eventbrite and get even closer to finding other like-minded people. Before you create a brand new group, be sure to look through Meetup.Com and Facebook to be sure similar groups don’t exist - since we can’t gather information automatically from 3rd-party sites, some of them don’t end up on the EcoMap.
Idea-stage ventures are what they sound like: typically, they are just an idea. You probably haven’t legally incorporated your venture, and you don’t have any users or customers quite yet. The team is probably just you, or maybe a few cofounders, and you’re mostly looking for help getting your idea off the ground and into reality.
Executive Coaches and mentors can seem similar, but they are pretty different. A coach literally “coaches” you in specific areas that they are trained or specialized in, while mentors typically offer guidance and advice from their personal experiences. Mentors can help you think about personal and business challenges, while Executive Coaches are often focused on your performance as a founder or executive. Importantly, Executive Coaches are typically paid, whereas mentors do so on a volunteer basis.
A group is our way of describing some collection of people who share the same interests, industries, or aspirations. Groups can be monthly meetup groups around a certain topic area, they can be Professional Associations for those working in a given profession, or they can be Networking groups. The definition is pretty broad, but the purpose of a Group is simple: to find your people.
This question has a pretty clear-cut answer - you should open a bank account for your venture as soon as possible. You can use your EIN number (which you can get online for any type of business, even if you are not incorporated) to open up a business banking account at any commercial bank. It is a good idea to do this sooner rather than later, because it can be difficult to look back and figure out what was, and was not, a business expense if everything is going through your personal account. This can make it hard to know how much you are earning (or spending) per month, how much personal capital you or others have contributed, and how the venture's finances look in general. If you choose a local credit union, you can likely open up a business banking account with No or Low monthly fees.
For many people, the cost of buying and maintaining prototyping and manufacturing equipment can be prohibitively high, and setting up the equipment is often incredibly complex and sometimes dangerous. At makerspaces, the costs of the equipment are spread out over all members of the space, and the maintenance is done by trained professionals. While you might be able to do some basic building out of your garage, makerspaces can help you do larger scale projects, or create more units of what you’re trying to make, or do projects that require highly specialized equipment. Plus of course don’t forget about all the great humans you’ll meet
There’s several benefits we could list - but you’ll know best why you’re there. We think joining a group can offer a friendly environment to meet new people, learn new things, and see new places. For some people it’s a networking opportunity for work, or helps keep them fresh on new topics with the people they meet, or it can help keep you accountable for reaching your goals instead of binging on Netflix. We think groups are especially beneficial if you are a first-time founder looking to meet other entrepreneurs.
Unfortunately, there is no clear-cut answer to this question. What you need to raise money depends on many circumstances, including your personal connections and creditworthiness, the type of venture you are building, and the traction you have achieved. If you want to raise debt financing (like loans), you are likely going to need either revenue or very good personal credit and the ability to put up collateral for the loan. If you want to raise equity, you’re going to need some very strong customer traction. Angel investors are sometimes willing to fund pre-revenue ventures as long as there is a clear market need and a solid team. Institutional investors will likely want to see revenue, Letters of Intent from stakeholders, or clear IP that obviously needs capital in order for it to be developed.
Once you have progress and traction for your venture, you're ready to start looking at early-stage funding sources. Thee most common sources of early-stage funding depend on the type of business you are building. For small businesses, you'll want to look at bank loans from local banks or micro-lenders. For startups, accelerator programs and angel investors are the best early-stage source. For nonprofits, now is when you start writing your first grants and soliciting the public for donations, if you have tax-exempt status.
Fellowships are short-term professional study, work or research opportunities. Think of them as continuing education - typically, they are focused on a certain topic or industry area, and your job is to either work in or learn about that area for the duration of the fellowship. Nearly all fellowships require you to apply and go through multiple rounds of interviews. Some fellowships cost money, some are free, and the best of them even pay you.
Venture Capital is a very specific type of equity capital that is utilized by high-growth startups. The vast majority of businesses (over 95%!) will never take VC, because the structure of venture capital essentially mandates that it can only be used by companies that have the potential to access $500m+ markets. The reason for this is that investing in high-growth, early-stage startups is super risky - there are a million reasons why any given company might fail. Because of this, the venture capital firm is going to end up losing money on most of their investments. In order to make a profit, the VCs are relying on 1-2 of their portfolio companies hitting it big - think an Uber or Facebook. The massive returns from these companies make up for all of the money that was lost on the other 90% of the portfolio. But since it's impossible to know which startups will fail and which will succeed, every single company that gets VC money needs to have the potential to make these massive returns.
Funding idea-stage ventures is one of the trickiest parts of entrepreneurship. Typically, any institutional investor is going to want to see more than just an idea sketched out on a napkin (unless you are a serial entrepreneur who has successfully started lucrative ventures before). Investors will want to see progress, meaning you have taken concrete steps to turn your idea into reality, and traction, proof that other people are as excited about your venture as you are.
The most common source of idea-stage capital is personal savings, although this may not be viable for everyone. Then there is the Friends and Family Round, which is exactly what it sounds like - you get your friends, family, and acquaintances to contribute money if possible. This still isn't going to be accessible to most founders, so the best outside places to look for idea-stage capital are going to be Microgrant/Microloan programs, pitch competitions, and very early-stage incubator and accelerator programs.
Bringing on external mentors and advisors is one of the best things you can do for your early-stage venture. Not only do they provide valuable advice and connections, but having strong advisors also signals to investors that other talented people believe in you and what you are doing. Typically, ventures have a formal Board of Directors, who get legitimate control over the operations and major decisions of the venture. Many Ventures have a less-formal Board of Advisors, who they turn to for industry-specific and other more day-to-day advice. Finally, there are mentors, which is a very informal designation that more describes their relationship to the founder than it does to the venture. When you bring on Board Members, you’ll need to follow the rules you outline in your Bylaws. With Advisors, you get to decide the process, but it’s good to have a standardize system for onboarding new advisors.
Ideas are a dime-a-dozen: the difference between a napkin idea and a billion dollar company is all about execution. If you are not talking to others about your idea because you are afraid they’ll steal it, you’re only holding yourself back from meeting potential partners and getting valuable feedback. If you are really worried about Intellectual Property, consider checking out some Pro-bono legal office hours to chat with a lawyer about your concerns. But otherwise, talk to the world about your idea - that’s the quickest way to move it forward.
Mentors a great way to gain expertise in areas where you’re not so confident. Perhaps you need advice on financials, or reaching out to customers, or with your marketing - It’s critical to get help from someone that knows the ropes and can save you from making the same mistakes they made when they were starting out. Plus, mentors can often open doors and make connections for you, which can be super helpful for your business
The Other category is essentially where we stick all the programs, and opportunities that we think are super helpful for entrepreneurs to know about, but don’t fall into one of our other Resource categories. Typically, there are not enough resources to justify an entirely new category, so we lump them all together under Other. The categories that fall under Other Resources include: Databases, Media Sources, Fellowships, Education Programs, Places, Pro-bono Services, and Talent & Workforce Development programs.
No you don’t, in fact it’s a great way to meet new people. These groups are the type of place where you’re *supposed* to meet new people and make new friends. Also feel free to bring someone along with you, and if you’d like there’s always the option to message the group administrator/leader and let them know it’s your first time - they’ll be excited to hear you’re coming, and will likely make an effort to help you get to know the other members.
Debt, Equity, and Grants are the three core categories of funding that you will come across. Each has a large number of sub categories, but this is more or less how they break down:
Often the names are used interchangeably: both are spaces created by members of the community to support each other in creating and building their new projects. They might be a non-profit or for profit but they’re one thing’s for sure, you’ll find people who are trying to make all types of things, whether jewelry or hacking a robot to fold your laundry. #LifeHacks. Sometimes, hackerspaces are used to refer to areas where people predominantly work with software & hardware, where makerspaces refer to spaces where you work with non-electronic products, but those designations are loose