In a struggling economy it can be challenging to make ends meet. It can even be more difficult for entrepreneurs to start a new venture. Business formation of a start-up, many times, will require a significant amount of capital and cash in order to get the venture off the ground. This is why the University of Michigan has created the TechStars accelerator program, which is designed to give aspiring entrepreneurs in the technology industry a helping hand in starting their new endeavors.
TechStars is an intensive course in entrepreneurship, which lasts three months. The accepted companies are granted $18,000 of start-up cash in exchange for six percent of equity in the new company. There is also an optional $100,000 in venture capital following completion of the program. More than 75 capital firms and angel investors nationwide have provided funding for the program. This is approximately a total of $1.5 million in venture capital funds.
One of the companies accepted into the program was started by five University of Michigan undergraduates. The company, called Fetchnotes, is a cloud service which provides students with a system for taking notes for classes. Users input notes directly into their cloud-based account via telephone call, text, or email. Notes can be organized using hashtags, while enabling users to add files to accompany the class notes.
If a person has a unique and innovative business idea, he or she may wish to consider opening a business by using venture capital funds, such as those in the program from the University of Michigan. However, the aspiring entrepreneur should make sure that he or she follows proper legal procedure for business formation. Also, the type of business structure chosen is important, because each structure has its own costs and benefits.
Source: Crain's Detroit Business, " UM students' cloud-based note-taking system joins elite group of startups in accelerator program ," Meghana Keshavan, Aug. 27, 2012