1. Funding COSC 405 Spring 2013 Bridget M. Blodgett

2. Money Rules Rule 1: Cash Flow, Like Oxygen, Is Pretty Important – Cash Flow = noncash charges + (net income – taxes) – This calculation is crucial to survival and dictates what projects you accept, how you bill, and how you pay your bills

3. Money Rules Rule 2: Time Is Money. Money Is Time, but Time Is No Weekly World News – “Time spent… arguing with customer service about your bill, …correcting mistakes in documents, …waiting in line, …talking people into not charging you late fees etc. – Make sure the person in charge of money: 1) is tough on spending, 2)asks pointed questions about timing, need, cost, and importance, 3) understands contracts – Find a happy medium between your budget and what is needed for tools then slowly upgrade

4. Money Rules Rule 3: Money Is the Root of All Problems – Most of Them, Anyway – Money distribution creates tension so be transparent and fair, everyone should benefit and owners can see the books – Try to build a savings Rule 4: Short-Term Survival is Crucial – Be ready to do anything for continued cash flow: if it doesn’t take away from your core work and can be done with your skills consider it – Burn Rate = cash + expected income - costs

5. Funding Methods Games require money, although the initial investment may vary wildly Generally there are a few common funding sources – Bank Loans – Small Business Innovation Research / Small Business Technology Transfer – Private Investors – Family & Friends – Crowdfunding

6. Bank Loans Many local banks or financial institutions offer loans specially structured to support small businesses Acquiring one usually requires 1) business plan 2) full accounting of all principle owners personal assets Focus on how the money will be used and repaid The list if assets will vary in importance depending upon how risky the company is and if it already owns assets http://www.sba.gov/category/navigation- structure/loans-grants/small-business-loans http://www.sba.gov/category/navigation- structure/loans-grants/small-business-loans

7. Small Business Innovation Research SBIR introduction site SBIR solicitations site Often a useful option if you are focusing on developing technologies that meet some business or scientific need You can only answer calls for submissions More stringent guidelines regarding who may apply

8. Private Investors Private investors are a diverse group: venture capitalists, local business development groups, prominent philanthropists or foundations This can be less expensive overall but they are often harder to track down and can ask for more in return The business section of the local paper may have some information on this groupbusiness section A business plan is still needed but the presentation raises in importance

9. Family & Friends Often those close may want to support your company in some way – This may not be a huge investment but it can often be helpful Ensure that any investment made is put into writing, including when the loan will be repaid and how Do no be insulted if they decline

10. Crowdfunding Crowdfunding is very recent (only permitted with the passing of the JOBS act) There are many different groups that offer crowdfunding but they often limit how that money could be used, topics they consider acceptable, etc. – http://www.forbes.com/sites/devinthorpe/2012/09/1 0/eight-crowdfunding-sites-for-social-entrepreneurs/ http://www.forbes.com/sites/devinthorpe/2012/09/1 0/eight-crowdfunding-sites-for-social-entrepreneurs/ This is still not a fully regulated industry in regards to the SEC and rules may change

11. Activity Consider your companies needs and current responsibilities Which of these methods seems like they could work for you? Research your chosen method(s) for the local Baltimore area and begin comparing the different options available for that method As a team, in a 1 page document discuss what method you chose, who are you moving forward with, and why you made that decision