10 Places To Find Startup Funds
by Diana Pemberton-Sikes
(c) 2000 by Diana Pemberton-Sikes
You have an idea, you've done the research, you've
finished the business plan, and you have an estimate of how
much it's going to cost to get it all off the ground.
The next step? Finding money.
Don't let this be an obstacle to your dreams. Here are
some places to look:
1. Savings and investments. Depending on how much you're
looking at, you may be able to pull the amount from savings,
CDs, stocks, or bonds.
2. Friends and family. This is a time-honored tradition in
some cultures and could be the best way to go, depending on
your situation. However, exercise caution: your finances
might become grist for the family rumor mill and you might
create friction if something goes awry.
3. Credit cards. Again, depending on how much you need,
you could use the cash advance line on a credit card as an
unsecured line of credit (albeit an expensive one). Look
low interest rates and cash advance fees. A recent Arthur
Anderson survey of small and mid-sized businesses revealed
that nearly 50% of all small businesses use credit cards in
some capacity to get up and running.
4. Bank Loans. Frankly, bank loans are tough for startups
to acquire. Usually banks loan money to companies that are
stable and profitable or whose officers have a successful
business background. They're not impossible, however. Make
sure you have your business plan in order before approaching
your banker. Try Sierra Cities for a no-hassle online
approach, www.niftybusinessideas.com/r/sierra.
5. Personal or Home Equity Loan. Since bank loans can be
difficult for first time businesses, you might try getting a
personal loan using your personal property as collateral.
That's where 20% of businesses find their start up funds,
according to a recent Arthur Anderson survey.
6. Selling personal assets. If you have antiques, jewelry,
collectibles, stocks, or real estate on your balance sheet,
you might consider selling them to get your startup funds.
A recent news story I saw reported that the antique jewelry
market has seen a surge lately as more and more people sell
unworn heirloom jewels to finance business startups.
7. SBA Guaranteed Loans. If you live in the United States,
you might be able to get the Small Business Administration to
back a bank loan. That means that while they don't loan
money themselves, the Small Business Administration will, upon
reviewing your business plan, help you find and secure funds
from the private sector. To learn more, visit the SBA site,
http://www.sba.gov/financing/indexloans.html. I don't know what's available outside the US, but you might
try your local Business Information Centers, Chambers of
Commerce, Employment Development Department, or similar
entity.
8. U.S. Government Grants. Get startup money from Uncle
Sam? Absolutely...if you're a U.S. citizen. There are
thousands of grants available for specific types of
research, and it's how both Donald Trump and Ross Perot got
their start. You'll need to dig a little, but you can
find a comprehensive list of grants at:
*The Catalog of Federal Domestic Assistance,
http://aspe.os.dhhs.gov/cfda/. Also try:
*The Foundation Center,
http://fdncenter.org/ *Fundraising and Grant Writing,
http://www.fundsnetservices.com/grantwri.htm 9. Angel (Personal) Investors. An Angel Investor is a
person or entity willing to invest in your startup for a
percentage of the equity. You MUST have your research and
business plan done before you approach them. Typical
investments stay in the five figure range.
An Angel's biggest concern? Getting his money back. Angels
also tend to invest in things they understand or participate
in, so approach people who are going to be the users, sup-
pliers, or people within the industry or market area. Don't
go after your technophobic lawyer to give you money for
your mp3 idea, for example.
10. Venture Capital. Venture Capitalists look for highly
profitable, very fast growing, early to mid-stage ventures.
They seek almost immediate returns on their money, which
often include funds from wealthy individuals and institutional
investors (i.e., pension funds) looking for a high rate of
return.
Often, they'll want a lot of control, and will bring in
their own people to "run the show." Venture capitalists
really like "hot" industries (high-tech, Internet, etc.)
and companies that are poised to go public.
Want some other places to look? Check out these sites:
*Business Finance --
http://www.businessfinance.com *Vfinance --
http://www.vfinance.com/ *NVCA --
http://www.nvca.org/ Ready? Set? Go find some startup money!
======================================================
Need some great ideas to start or expand a business?
Sign up for Diana Pemberton-Sikes; FREE bi-weekly news-
letter, "The Bright Ideas Bulletin",
http://www.niftybusinessideas.com. | DISCLAIMER: The content provided in this article is not warranted or guaranteed by Developer Shed, Inc. The content provided is intended for entertainment and/or educational purposes in order to introduce to the reader key ideas, concepts, and/or product reviews. As such it is incumbent upon the reader to employ real-world tactics for security and implementation of best practices. We are not liable for any negative consequences that may result from implementing any information covered in our articles or tutorials. If this is a hardware review, it is not recommended to open and/or modify your hardware. |
More How To Articles
More By Developer Shed
