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Ten Tips on Finding Funding
Despite the current economic downturn that seems to be lasting longer than expected, angel funding and venture capital dollars are still available to companies that can prove they have revenue generating potential, have a strong management team, etc.
Venture capital and angels
investing received a lot of attention in the 1990's as new economy
entrepreneurs were building "designer" companies that were
built to be sold. But throughout business history, real companies
have been built from funds found in many places:
1. Look in your own bank account.
As in the past, entrepreneurs
will expect to fund part of their new business from their own wallet.
It is the only way to truly get started. It does not matter how much
it is, only that it is significant to you. It also enables you to
respect other peoples' money too when you take theirs.
2. Talk to your friends and family.
This is the all time favorite
place for funding of start up businesses. The good news is that they
will invest because they love and care about you. The bad news is
that it's not a lot of fun to lose their money and may change your
relationship with them forever. On a bad business day, you will never
be able to truly answer their question "How is the company doing?".
3. Find a customer that believes in your product and you.
Traditionally, businesses have started because someone asked someone another person to do something and was willing to pay for it. Find that person who will pay you to solve their problem. You will have an instant business. and put you in business.
4. Talk to your accountant or attorney.
They will be able to give you excellent referrals since they deal with "money" people all of the time. They should be your first referral source. Ask those referrals to give you three more names and so on.
5. Find a Mentor
Find someone that will help you spread the word about your business. They should share your passion and vision and be your evangelist to the world.
6. Network
Attend seminars, go to events, and talk to anyone that will talk to you. A strong referral is the best way to get in front of the right people. Also, keep these people up to date on your progress even if you do not need resources from them at this time.
7. Submit your business plan to business competitions.
There are many groups that allow you
to post your business plan on their Web site, utilize their webs site
for review by allowing potential investors to review and giveThey
can give feedback on the business plan and/or learn about your company
for investment consideration. Sites such as BusinessPartners.com,
Angel Investor
News (www.angel-investor-news.com),
and CloudStart.com
allow you to post business plans for investor consideration and allow
you to search for firms in your region.
8. Contact Angel Groups and other area resources
There are several excellent groups that are national and regional. There are an endless number of resources online to help you learn more about attracting capital and funding such as TannedFeet.com, StartUpBiz.com, and BarryMoltz.com (my personal favorite!). A national list of angel groups can be seen at a Kauffman foundation sponsored web site, www.angelsummit.org
9. Achieve Business Milestones
Nothing gets money like business success. Investors want to put their money in businesses that have achieved their targeted milestones and show a promising future.
10. Attract an Excellent Management Team
Investors put their money in people not a business. The better team you have, the more money you will be able to attract. Get people on your team that have industry expertise and that have been there before. Investors want track records.
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