Small Business School
All about money, value, and capital
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Small Business School
Small Business School

Money at Step 6:

Using your equity.
Angel & Venture Capital

 

You have a track record. Now pay less for the money you need to grow your business. You can position your business from strength if you know how it compares to others in your industry. Add an on-going business valuation. Add a clear analysis of your financials. Back it up with managers who can do likewise, and your business model really begins to work for you.

Again it is important to repeat: The more you know about your financials (and the more you can interpret about your business), the more equity you'll keep in your business in exchange for the largest amount of capital infusion.

Angels. Angels provide bridge loans as well as equity capital. Consider the listings provided by AceNet, now located at California State University - San Bernardino. It is the oldest listing around the USA.

Meet one entrepreneur who relies on an angel rather than a bank for her working capital. Auntie Anne's story is especially worth the review; go to the Case Study Guide and learn about an angel that takes on her debt; he is a farmer. Also, review the show called, We'll show you the money. Then, meet the consummate angels in California's Silicon Valley. They have so much audacity they call themselves, The Band of Angels. There are angels in your backyard. Remember our story where we found an unlikely angel in Huntsville, Alabama.

Venture Capital. We discovered Woodside Fund when we did the episode about The Enterprise Network. There are now venture capital groups in every part of the country. Just insert "Venture Capital + "(insert your closest big city)" and you should find some local people.

Again, review "We'll Show You the Money." Be careful. Venture capital can be expensive. It can rival an IPO in expense and in dilution of equity.

If you wuld like some help to do more research, these sites have been doing venture capital research for years:

Although some people say you should be looking for no less than $1,000,000, we believe you should be looking for at least $5 million (sometimes we even think $10M is the best starting point) before you consider venture capital. Anything less is not worth the effort of the venture capital firms and it is not worth percentage of the dilution of your equity.

There are no two business owners who are alike. No one formula works for every one and ultimately the decision rests on the abilities and leadership of you, the founder/owner and chief executive officer. Your board of advisors can help, but the decision is yours.

Please review the show that we did about Staying Power, especially the case study guide


Have a great story to tell? Does it teach us something more about one of these ways of raising money? Let us know and we will publish it here.

As we continue to add capabilities to this site (see the Future), these could become hot pages. Eventually we will schedule events so you can meet investors and drop off into individual chat sessions. We are just beginning this project. Help out!Send us a note.

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