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Raising
Capital HOME |
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Raising
Capital "How to" Articles |
Growing a business takes planning, hard work, and most important, a good source of financing. To grow a business, it is often necessary to attract financing from banks, outside investors, venture capital sources, venture angels, and others. The process of obtaining financing embraces an intricate maze of issues and decisions.
Here are a number of
articles that we have
found while researching the topic of raising capital.
Business
Week Online
There is a large resource base available here ... including a free
workbook. It is a step-by-step guide to creating your business plan
and funding request.
A
Venture Capital Primer
With so much venture capital around, you would think raising money to
start or grow a company would be easy. But securing venture capital is
still a challenge. Venture firms are really equity investors, that is,
financial partners, who ride the success of your business. They'll expect
to be compensated handsomely for the risks they're taking, and they look
for companies that have the ability to become significant players very
quickly. This article explains what venture capitalists look for in a
business, and how to position yours to attract the capital you need.
http://www.entrenetwork.com/articles/39.cfm
Angel
Investors--Inc Magazine Report
When
you're in search of financing, the idea of an angel -- an individual
investor with money to invest in early-stage or start-up companies -- can
seem nothing short of enchanting. But where do you find an angel? In the
November,2000 issue of Inc. magazine, you can read how the owners
of Wetzel's Pretzels tapped an existing customer as an angel. Typically
though, courting an angel is less serendipitous. If an angel doesn't fall
in your lap, try these resources for finding and working with angel
investors. There are a number of links to other related articles.
http://www.inc.com/guides/finance/24011.html
ABCs
of Venture Capital and Angel Investors
What differentiates angel investors from professional venture capitalists?
In addition to a good side-by-side comparison of the two types of
risk-capital suppliers--how they operate, how they manage risk, and how
much money they invest--the article also provides the names of networking
organizations that focus on equity financing.
http://www.bizjournals.com/washington/stories/1997/03/17/sma
...
How
Venture Firms Evaluate You
Although short, this article explains the key, critical criteria by which
venture capitalists will judge your venture's prospects, including the
formula used to assess your company's growth prospects. For example, one
of the key elements venture capitalists look for is meeting highly
specific customer needs in a way that allows growth beyond the initial
product line.
http://www.accel.com/entrepreneurs/advice2.html
Venture
Capital Analysis
This article is a 'must' for any entrepreneur considering seeking a
venture capital investment. Although no article is a match for talking
with other entrepreneurs who've been through the process, this piece
effectively covers some of the issues and challenges of raising venture
capital financing, including finding venture capital, industries that
attract venture capital, qualifications for venture capital, the due
diligence process, how a venture capitalist will value your company, and
how an investment might be structured.
http://www.morebusiness.com/running_your_business/financing/
...
How
to Raise Money for Starting a Business
This report from The Internet Marketing Center is loaded with unique ideas
for collecting small capital infusions from alternative sources, along
with a nitty-gritty roundup of what your prospectus should tell investors.
Unless you've already tried such creative approaches as having an
"investor party" or asking your dentist to pass the word along
to his (or her!) investment club, check out this site.
http://www.webcom.com/seaquest/sbrc/raisemny.html
Putting
together financial projections that attract investors
The first question would-be investors ask is "What do your financial
projections look like?" The reason investors ask this question is
simple: Companies are valued in relationship to their earnings. Hence the
future value of the investment depends on how the company performs down
the road. As a result, access to growth capital depends in large measure
on the entrepreneur's ability to paint a credible and compelling picture
of his or her company's financial prospects through a projected income
statement.
http://www.entrepreneur.com/Magazines/MA_SegArticle/0,1539,2 ...
When
Seeking Outside Funding for a Start-Up, Plan for Employee Ownership
Why would you set up an employee ownership plan BEFORE you seek outside
investment? Because,says this article, venture capitalists and angel
investors like to see this. They want to know your key people have the
same goals they do. Here is a fascinating appraisal of an investor
incentive that many entrepreneurs overlook.
http://www.fed.org/onlinemag/feb99/tips.html
Streetwise
Tips on Getting Money
The brainchild of an entrepreneurial publisher, Bussinesstown.com focuses
exclusively on the needs and interests of small and emerging businesses.
The finance page, just one aspect of this extensive Web site, divides
material into Getting Money, Money Problems, and SBA Loans. Under Getting
Money, you may click to definitions and descriptions of such concerns as
lease financing and factoring. Extensive links to other Web pages make
this a fruitful place to start your search for funding opportunities.
http://www.businesstown.com/finance/money.asp
America's Business
Funding Directory
This oft-linked Web site is designed to help entrepreneurs locate business
funding. You may answer the questions in the Business Capital Search
Wizard and, based on your company's industry, size, and stage,
BusinessFinance.com will lead you--free of charge--to valuable resources,
experts, and contacts. But before you try to reach potential sources of
funding, it might be wise to download from the Expert Center the free
workbook guide on how to prepare a successful funding request. Expert
advice and a library of links to leading small business resources round
out the impressive usefulness of this site.
http://www.businessfinance.com/
A
Venture Capitalist and Business Planner Look at Business Plans
Articles about how to write a business plan are appearing everywhere, but
here is an informative one that looks as somber as textbook chapter, yet
tells you to use a few well-placed graphics. You'll get a sense of the
balance needed between seriousness and catchiness, as well as a list of
important questions to answer if you're presenting the plan to venture
capitalists or other potential investors.
http://www.vfinance.com/articles/bplanarticle1.shtml
Venture
Capital Angels
The author assumes everyone has heard the term "Venture Capital
Angels", but even if you haven't, here is a clear and concise
explanation of how these investment hybrids operate. V.C. Angels provide
first-round financing for risky companies, usually start-ups or companies
with unstable financial track records. The angel will join your management
team, so read this article if your company can benefit from a hands-on
alternative investment source.
http://www.vfinance.com/articles/MarkAbrams.shtml
The Growth Company Guide to
Investors, Deal Structures and Legal Strategies
Here, free, is the complete text of a 302-page reference guide, with
chapters that explain just about every term and concept that should be
know to you, the entrepreneur. The site has over 200 key-word entries,
alphabetically listed, from Adventure Capitalists (entrepreneurs who
invest in others' ventures) to Windows (the time you have to take
advantage of a product launch or equity offering.) Skip the last entry,
Zeal: if you don't have it already, you're in the wrong place
http://www.growco.com/
Build
a Strong Business Plan
From the table of contents to the financial tables, a business plan covers
a lot of ground. How can you make your executive summary stand out? How
much detail is appropriate when outlining your marketing strategy? What is
the best way to present the financial projections? Here are inc.com's
best resources to help you create each part of your business plan.
http://www.inc.com/guide/item/0,,CHL2_GDE66,00.html
High
Tech Growth Companies Turn Aggressive In Pursuit Of Financing
How are the fastest growing high tech companies in the U.S. financing
their growth? According to a Price Waterhouse Coopers survey, they have
been much more active than their non-tech counterparts extending their
credit lines, completing new bank loans, and exploring non-traditional
financing. Capital is essential to rapid growth, says this report, and
outside sources of finance are abundant. Read this report to learn why
reinvestment of your own cash flow might not be the way to stay on the
fast track.
http://www.barometersurveys.com/pr/tb990106.html
Capital
Search
Looking for working capital? BusinessWeek offers an informative free
capital search that helps find potential sources of commercial finance,
venture capital, investment funds, equipment finance, real estate finance,
and government grants. If you're not sure what type of financing is best
for growing or starting your business, this site offers criteria to help
you figure out who to approach.
http://www.businessweek.com/cgi-bin/smallbiz/frontier?url=%2
...
Questions To
Ask About Angel Financing
Way before you structure a deal with an angel investor, step back and make
sure you make the right moves. This article describes the variety of stock
types entrepreneurs can offer angels, how long angels should serve on
boards of directors, and negative covenants.
http://www.stybelpeabody.com/quesang.htm
Private Offerings
Are you thinking about raising capital from private investors or going
directly to the public without registering an IPO? You'd better make sure
you're playing by the rules and regulations of the SEC and comparable
state agencies. This article explains the rules that govern Regulation D,
Regulation A, and Small Company Offering Registration (SCOR) approaches.
http://www.venturea.com/pvt.htm