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== == Sources for finding investors

Angel Investors

Venture Capital

Bank and Micro funds

Friends and Family

Government funding


Business Incubators

International Funding

Community Development Financial Institutions

Finance companies

Private Loan Guarantees

Short-term financing

Public funding sources

Credit unions

Advance against future sales

Pre-Launch Funding

Royalty financing

Have you tried the bank yet? If you go to them with a detailed portfolio and show them that this business will make money, then they will most likely give you a small business loan. A start-up business is among the most difficult to get financed due to the lack of operating history. Therefore, it is in your best interest to try to self-finance the business for as long as possible, until you have established some type of record. The first step is to determine your start-up requirements by identifying all relative expenses that your business will incur during its start-up phase. Some of these expenditures will be one-time costs, such as a security deposit for rent. Other costs will be ongoing such as monthly utilities, insurance, etc. Once you have properly identified your "realistic" start-up costs, you can determine whether or not you have the ability to support the business on your own through the initial start-up period. If not, you do have options. Start by asking your friends and family if they would be interested in investing. Be careful. You don't want to cause any hard feelings or place a financial burden on anyone close to you. Your next option is to take a look at what you own (personal assets) that could be used as collateral (house, land, rentals, investments, etc.) for financing the business through a traditional bank. Most lenders and investors require a business plan, so be sure to have one available. Typically, bank financing is not available to start-ups unless fully collateralize by deposits/assets from the owner(s) of a business. Even then, the bank will be reluctant unless it has complete confidence in the principal and/or management team. If you are turned down by a traditional bank, you can then approach the Small Business Administration (SBA). If your start-up is capable of supporting a large and growing market, you might be able to win over an angel investor or a group of venture capitalists. This is a tough undertaking and cannot be approached by the lighthearted. At the seed stage, funding usually falls in the range of $50-100k. Networking is the best way to find an investor. Ask you accountant, lawyer and business associates for referrals. Personal recommendations are often the only way to get your foot in the door of an investor. You can also visit after-hours business networking events. Check with your local Chamber of Commerce. They are a great source for all business related information and might be able to point you in the direction of an angel or VC. The internet is yet another option.

I fully agree and would like to add you can also try to find a business partner that has assets they can invest. You do not only get the money but a partner as well to help making it easier to take some of your business hurdles.

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โˆ™ 2009-07-11 09:22:26
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Q: How do you find investors for a start-up business?
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