Raising Capital for Startups

Raising Capital The challenge that many entrepreneurs find most intimidating is raising capital for their startup business. Finding and securing cash takes careful research, good bargaining skills, and most of all, a tenacious commitment to launching your new business.

Begin your capital search with a good business plan that shows investors and lenders your company’s potential. Then, look at your personal assets and savings to see how much you can contribute from there. Next, try family and friends who know you and want to support your business. You should also try your local banks. Look for angel investors and venture capitalists, and also consider government grants.

When pitching your ideas to banks, investors and even family or friends, you should follow these guidelines:

• Determine how much time is allocated to your meeting and manage your presentation accordingly.
• Your presentation should be unique to your business, while following a logical sequence.
• Approach the meeting as a formal conversation – be straightforward and set up a foundation for trust between you and your potential investor.
• Listen carefully to your potential investor’s opinions.
• Ask about the plan for follow-up.

Investors and bankers are often swamped with business plans, and wherever they go want-to-be entrepreneurs approach them. The trick is to make your business stand out in their minds. Volunteer for entrepreneur clubs so that you get the opportunity to work along with venture capitalists on an equal level. If possible, make presentations at meetings of these clubs or do mentoring, so that you become well-known by others in the industry. In this way, it will be easier to secure financing for your startup company, and it will also give you the advantage when your small business is ready for expansion.