So, you have kicked off a new business, and you are looking for a way to get funds. First of all, you need to keep in mind that there is no best way to fund a new business. Each method has its own advantages and disadvantages. Moreover, a method that worked for one type of business may not work for your business type. Therefore, you should go over the options given below and choose a method based on the type of your business.

Self-finance

If you have set some money aside during the past few years, you can use it for your business. Self-financing is a good option as you won’t have to borrow from anyone. On the other hand, if things don’t go as planned, your hard earned money will be gone forever without giving you any return.

If you can’t risk losing your savings, this option may not be suitable for you. But if you have a large amount that you saved, you can invest some of it and save the rest for rainy days.

Bank Credit Cards

Using credit cards to fund your business is another good option, but keep in mind that you will be paying huge sums of interest for several decades because the interest rates on credit card transactions are very high.

However, the upside is that using bank credit cards to fund a business is an easy option as long as you are fine with high interest rates.

Friends & Family

If you don’t have enough savings, you can ask your family or friends for money. However, make sure you return the money on time or your relationship with that person may get affected. Plus, if your business fails, they will get upset because they have an emotional attachment with you.

Mortgage

You can’t get a bank loan unless you don’t have a good credit record and collateral. So, what you can do is mortgage your home or farm to get a loan. While this can get you a business loan, you will be paying back the loan whether your business becomes a success of failure. Your house or farm can get sold out if you fail to pay back the loan.

Angel Investors

Someone from your friends or family can become an angel investor for your business. They will provide funds for your small business in exchange of a share in the ownership of the venture.

Before you sign an agreement with your angel investor, make sure the terms and conditions of the contract are clear to both of you. This will help you prevent disputes in the end.

So, these are a few good options for you to get investment for your new venture. All of these options are good and work for small ventures. But make sure you have evaluated all the options before choosing one. The success of your business depends on the capital and if invested after a lot of thinking, your chances of success will go up.

AnalytIQ Group is the company that can help you get funds for your new business. Contact them as soon as you can.

1. During the past decade, the size of seed rounds has remained stagnant and number of deals have decreased. To the untrained eye, it seems that there is more competition for seed dollars. Below the surface, however, startups are recycling founders experience. The reason why the number of deals has decreased is that teams are better prepared, are more financially savvy, have access to better-priced support, waste less time and resources, are using other forms of funding PRIOR to seed rounds, and are pivoting or deciding to get out earlier -at the pre-seed stage. (Founders will jump into exploring new opportunities).

Founding teams are recycled

2. More firms seeking seed rounds already have sales, expression of interests, and some form of market validation as a result of the circular economy of entrepreneurial mind and action. Firms that seek seed rounds are more advanced than 10 years ago. Founders are using other ways to get funded (as they should! Because seed funding is very expensive!), AND they are also recycling the experience of founding, co-founding, advising, and/or being early employees in previous firms. This is creating a circular economy of entrepreneurial experience. Not just serial entrepreneurs but a large pool of people who have experienced startup development (failed, successful, and everything in between, in so many roles!).

Supplier of funds are recycled

3. More investors are getting into each round, and seed rounds have become more collaborative. More and more small funds, angels and angel groups are co-investing. That means more eyes are evaluating deals (GOOD) but also BAD deals are getting through because the impact of each deal in the overall portfolio is lower, and the FOMO (fear of missing out) can get that signature! Think Theranos (ouch).

TIP: Nobody talks about the herd mentality and there will be some lessons to learn going forward. Because of the cycling and recycling nature of funding, early investors are able to scan deals early, with lower amounts, and, if they want to play in future rounds, they need to get in early and with others: pay to play.

Founders and funders’ recycling is also changing the exits:

4. Exits are being recycled too! Companies are being acquired, taken public, broken into pieces, resold, privatized, re-public’ed, and there are many emerging opportunities for exit. This is actually an area ripe for disruption. Welcome to the world of recycling exits.

And the funding process has become more interesting and complex.

5. As both entrepreneurs and funders become more comfortable navigating many options of funding startups or grownups, new funding options are emerging: there is better knowledge about crowdfunding, cryptocurrencies, hybrids (safes/convertible notes), and SFI-types (can we call this special funding instruments?). Capital suppliers are borrowing mechanisms from SPV, SPE, and SVI. I can’t wait to see what new options sprout of this.

All of these recycling and repurposing has an impact on ROI and capital markets

6. Cycles are longer: It takes longer to climb a larger mountain, especially if, along the way, there have been some quasi-exits, pivots, more and larger rounds. This is having an impact on the way we negotiate funding going INTO the firm, because there is light at the end of the tunnel, but the tunnel is getting much longer. Combine this with the uncertainty of how investors get OUT. Again, this is an area ripe for disruption and I can’t wait to see new options emerging. With longer cycles, the return on investment decreases, so firms are pushed into finding new and disruptive ways to excite investors and NEW investors who supposedly are more risk-averse and adventurous, but in reality are reckless.

Longer roads need more resources,
But the supply of capital does not exist in a vacuum

7. Public markets are shrinking, and investors -especially institutional investors- are navigating through a rollercoaster of political insanity. Mostly derived from the surprising interest in protecting borders than in having healthy global economies, financial and economic illiteracy is permeating the political arena where decisions are reckless and financial managers are focusing on reducing stupid (gasp) risks instead of creating and supporting new wealth.

Overall, a combination of healthy recycling of talent, capital, and technology is fueling the economy despite mistakes made by politics.

For investors the signals are clear: Get in early, support many startups, learn and collaborate.

For entrepreneurs the signals indicate: Use many forms of funding, use dynamic funding, ask investors for support (not just money), and create dynamic teams.

Oh, and for small business owners that think “small is beautiful”, now, more than ever, my famous quote of 100% of 1 is 1, but 1% of 1000 is more, is more valid than ever. Get in line, ditch the illusion of a “safe” and embrace the “growth” mindset. If we stop growing, we start dying. Small IS beautiful, it is just not sustainable.

For Government and Economic Development Agencies, the puzzle is getting more and more complex… Hang in there!

We really don’t know what we are doing, but we are doing!

Alicia Castillo Holley is an international expert on Wealthing (R) a system to create wealth. She has started 9 companies and one not-for-profit, raised millions of dollars and trained thousands of people. She’s a recognized author and speaker and travels around the world twice a year as a speaker /trainer. http://www.wealthing.com

Raising money for business can be a very useful and potential litigious activity if not done properly. It is important to keep certain rules/laws in mind so that you and your potential investor(s) are on the same page throughout the entire process. Raising venture capital from business angels or a venture capital firm is no easy task however, but it is possible with all the right ingredients.

Seven Essential Rules When Raising Money from Angel Investors

1. Always have a complete, written, professional business plan.

2. Always tell the potential investor that the worst case scenario is that they can lose their money.

3. Make sure your assumptions section of your business plan is extensive, accurate, and professional.

4. Have a CPA (Certified Public Accountant) prepare your cash flow projections using the NPV (Net Present Value) break-even point.

5. Dress conservatively. Men wear a blue suit, white shirt, and a red tie, for example.

6. Be confident and look them directly in the eye when presenting to U.S. prospects.

7. Have your attorney review any agreement before signing.

When presenting to an angel investor always have your written business plan with you and use it during your meeting with your prospective investor. This is extremely important. When the investor asks to see your business plan, you better have one or you are dead in the water. Not having one is truly a deal killer. If you are empty-handed, you will look amateurish and hurt your credibility. Not having a business plan is like showing up to play football and purposely leaving the football at home. It is your most valuable and most essential tool set when seeking money for business.

Cash for business when you start up and continuous cash flow are two of the most critical factors that determine whether you survive long enough to have a chance to thrive and become profitable. The old adage “cash is king” holds very true here; it is liken unto a beating heart, if it stops, you are no longer living. If your cash flow stops or you run out of cash for business operations, then you are out of business. Often times business angels will agree to provide initial and future funds for business. Future funds for your business are often tied to benchmarks that you will set together when you start your financial relationship.

When dealing with private investors (angel investors), they already know that the worst case scenario is that they could lose their money. If you do not acknowledge this well known fact as being true, they may feel that you are deceiving them, and rightfully so. By getting this out in the open, you become a truth-teller, an honest broker, and as such, more trustworthy.

The assumptions section of your plan is your logic, reasoning, and basis for your conclusions. This shows the potential investor how you think, what you know, and how well you can apply what you know to a business situation. This section is a double-edged-sword. It can be your best friend if you are savvy and know what you are doing, or it can be your worst nightmare if your assumptions are grounded in fantasy instead of fact. The cash flow projections are also a particularly important part of your business plan and should be prepared by a CPA.

The conservative dress mentioned in rule number 5 has been studied and found to increase your ratio of sales closed to number of presentations given. Go with what works, regardless of the urge to dress differently. Be confident and look them in the eye for U.S. prospects. There are other cultures that you should not look in the eye as much, so do your homework if presenting to international prospects and find out their culture norms in advance. This paints a positive picture in your U.S. prospect’s mind, one of confidence, sureness, and honesty.

Have any agreements that your private investor (angel) may offer reviewed by an attorney before you consider signing. Do not fall victim to the pressure of urgency. Take a day to think it over and present it to your attorney. You will look more intelligent to them and will be able to make a much more informed decision.

Business help can be an essential part when seeking cash for business. This is particularly true when it comes to raising money for a new business. Part of your preparation to raise capital is researching, writing, editing, and producing your written business plan. Often times, we as entrepreneurs get so close to our own business plan that we lose our objectivity. In other words, we fall in love with our plan, making it difficult to clearly see any mistakes or flaws in our facts or assumptions. This is why having the objective feedback of another person that is skilled and educated in business is crucial. Seek out the help you need and do it right. I wish you the best of luck in your efforts.

If you would like further help with developing your business plan or would like more information on venture capital, please visit my Amazon Author Page to discover my latest books.

Mr. C. Mark Johnson is a writer, author, and entrepreneur. He holds a Master of Business Administration (MBA) in International Business and numerous certificates. Mr. Johnson is also a United States Air Force veteran. He lives in the Southeastern United States and enjoys traveling, trail walking, walking and training his dog, and the martial arts.

The line in the sand has been drawn. You’ve vowed to never step foot back into that office alive again after working the same dead end job for ten years. It’s time to start that business you know for sure will succeed. All you need is to dedicate those sixty hours a week to your own bottom line. There’s only one roadblock. You have no money and the bank has already denied you for several other loans. All is not lost. Seek the help you need from those venture capital firms or angel investors you have heard so much about at meetings.

A venture capital firm is a collection of investors looking to throw their money into the next great idea that will grant them generous returns. With their money, your restaurant, retail store, or latest invention transforms from a day dream into a reality. Several options of repayment, ownership, and terms are discussed between you and your angel investors on how you will reward them for believing in your idea. First, you have to win their confidence.

The most important part of your business is your business plan. Before you approach a venture capital firm, do your homework. Transfer it from your brain to paper. Your goal is to create a business plan that will motivate investors to write your company name on that blank check. Also, in writing your business plan, you will discover how much you know or don’t know about the adventure in which you will embark. Or you may find the concept is not as fabulous as you imagined.

Start with research. Intense study uncovers little known nuances about your new chosen industry and fills holes in your concept. Identify your competitors. Dissect their company products, services and policies. What don’t they offer that you can implement into your business concept? Find a niche in the market that will set you apart from others who may be seeking the same clients, customers and investors you want to attract.

Next, examine the industry trends. Analyze the data. Find out when sales and profits are at their lowest. Are you merging into the gift basket business that suffers during the summer, after mother’s day? Brainstorm ideas you can include in your plan to overcome those industry wide obstacles.

Use your data to make logical predictions of future industry trends. Can you predict a disaster like the “dotcom” failure at the end of the twentieth century? Your potential investor friends will want to be shown the money. Show it to them in standard financial and cash flow statements.

Now, come back to the beginning and write a two-page summary of the company. This will serve as the introduction to your business plan. Some experts call it the Executive Summary. I call it the sales pitch.

Your summary will be the first section investors read about your business. If it doesn’t sell them, then it becomes the last thing they read about your business.

Take your time, do your research and make sure your business plan sells, sells, sells!

Yasheve Miller is web copywriter and internet marketing specialist whose primary focus us to generate leads and convert prospective customers into sales for his client. [http://www.yasheve.com] makes small businesses competitive with branding and marketing campaigns tailored to each individual business.

Venture Capitalists are often called Vulture Capitalists and until you read the book: Confessions of a Venture Capitalist, Inside the high-stakes world of start-up financing by Ruthann Quindlen; well you probably will never understand how they got that slanderous title. In the book Ruthann explains what it was like working in Silicon Valley in a Venture Capital Company prior to the dot com bubble burst.

If you are considering getting venture capital for your startup company then perhaps you should read this book. After all would you like to sit down for a cup of coffee with a venture capitalist who has been in the industry for years before you go in pitch your business plan? In the book they describe how venture capitalists will work with many companies at one time expecting that one or two may make it to a huge payout. The rest they expect to either break even or lose money and they will eventually dump.

The world of venture capitalists is about return on investment in a very short time period and they are not looking for just making a profit they are looking to make 10 times or more the money they invested. There are many venture capital firms and often they bet on the jockey and not just the horse. A business idea or concept may be very good, but if the entrepreneur is unworkable the venture capitalists will have to pass. Please consider all this in 2006.

“Lance Winslow” – Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/. Lance is an online writer in retirement.

So often we find that entrepreneurs are looking for venture capitalists to fund their next adventure. Unfortunately many entrepreneurs do not understand that venture capitalists are pretty industry-specific at least the very good ones are. Why is this you ask?

Well, because even venture capitalists have limited amounts of resources and hundreds and hundreds of deals that people want them to do. They cannot use them all and they want to make sure they get the most bang for their buck; that includes the quickest return on investment for the least amount of capital outlay in the shortest amount of time.

You can see why a venture capitalist’s job is not easy and why it is so important to find the right one that is industry-specific to you or entrepreneurial business plan. There’s really no need to contact venture capitalists, which do not specialize in your industry other than perhaps to ask them for a referral to call, because they are busy and not interested. They truly aren’t and it is nothing personal is simply business.

LOGON NOW!

There’s just not enough time in the day to read all these great business plans by all these entrepreneurs. In fact in my day I have read a number of business plans too many to list over several years and I imagine a venture capital is probably reads that many business plans in a single week. Don’t waste their time and do not waste your time.

You need to make sure they’re industry-specific to your industry ask them if they are interested by phone and if so send them an executive summary, not the entire business plan as it will just become scratch paper or end up at around file.

“Lance Winslow” – Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/. Lance is an online writer in retirement.

When is the right time to consider VC or Private Equity for your enterprise? Initially every entrepreneur needs to first see if they have exhausted all other options first. Typically, a company would be low on equity when considering private investors. There are however multiple sources of equity capital, including, Friends & Family, Business Angels, VC’s, Corporate/Strategic Investors, Private Equity companies or The Entrepreneur’s own capital.

For those seeking capital of $500k+ look for VC. For smaller investments, entrepreneurs should seek a Business Angel or Debt Capital. An understanding of the different types of funding stages is therefore useful so see below.

Pre-seed funding is funding that is needed prior to physically construct the enterprise. Usually this funding goes to putting together a good business plan that can impress potential investors.

Seed funding is funding that is required to start building the company. It is possible that some companies could if appropriate skip this funding phase, but seed capital is usually the capital that is required to get the basics for a start-up. Usually at seed stage, a company is not yet ready to open for business, and this funding is usually used to rent office space, real estate, equipment needed to produce the company’s product or service

Seed funding is less commonly invested by VC’s and is not necessarily a large amount of funding. Seed funding can range from $100k-$500k. Rarely does it exceed $1m. Seed capital can also be raised from a Business Angel, Friends and Family or the Entrepreneur’s own funds. Only 15% to 25% of VC’s invest in seed funding.

Early stage funding is usually where VC is sought. A company is usually ready to trade but requires additional capital for salaries.

Later stage funding is also known as expansion/growth stage funding is for companies who are doing well and are seeking to expand.

There are numerous ways that entrepreneurs raise seed capital to get started. These conventional ways include raising debt capital from a business lender, merchant bank or angel investor who are willing to invest seed capital into the business. Other more ingenious entrepreneurs raise seed capital through raising debt capital, sweat equity and funding from friends and family. VC is usually raised with early stage funding, i.e. as above, series A or series B funding. In most cases, VC’s will not invest less than $1 million in a company.

Understand these and you will be off to a good start and be taken seriously.

If you need help or guidance contact AnalytIQ Group

Being in a business means that you have to keep generating the money all time to manage finances and to operate the business smoothly. However, one thing that needs to be mentioned is that every business owner wants to expand his/her business for which a partner may be needed – be it for capital infusion or a specific skill-set. Joint ventures have become an increasingly popular choice for businesses as it allows them to leverage on the benefits brought in by the Joint Venture partner, thus enabling the business to grow exponentially.

A Joint Venture is a kind of business agreement wherein both the parties make a Joint Venture agreement (JV Agreement) so as to develop a new entity and new assets by contributing equity for a fix period of time. Both parties control the enterprise and share the revenues, expenses and assets when it comes to carrying out the project and the parties are known as ‘co-ventures’. Joint Ventures are appropriate for all kinds of businesses, both big and small or a start up or established business house. As the cost of initiating a project is quite high, both parties with the help of JV agreement can share the burden equally on shoulders.

A Joint Venture agreement can involve a lot of money so there is a necessity to have a proper plan on paper before starting out. Before selecting a partner for such venture, the screening of prospective partners comes into being. One has to short list the partner after thoroughly checking his credentials.

There are lots of online website, which offer space for businessmen to invite other businessmen to jointly collaborate on a project. These websites also offer a myriad of services to such interested parties to ensure that they are going in right direction and can keep faith in each other. Both the parties need to register on the website and then they can start working on mutual commitment. A JV is a good solution to handle the financial burden with ease. Thus, it becomes essential that both the parties sign a JV agreement so that managing everything becomes easy.

These types of ventures make it possible for businessmen to allow new technology and new methods of running the business. The business opens up for new opportunities and since there is more work, employment opportunities also increase and that means Joint Ventures prove beneficial for a country’s economy as a whole.

Joint Ventures can happen in nearly every type of industry be it food to clothing or housing development. The sectors covered under such ventures can be anything from private sector to public sector. Everyday newspaper pages cover these ventures happening throughout the country and such stories encourage other businessmen to indulge in such joint venture agreements as well.

If you are looking for more information on Joint Ventures or are on the lookout of a JV partner, Contact our client center.

Venture capital firms are different from private investors in that they have raised capital from a number of high net worth individuals with the intent to make investments on their behalf into promising start up companies and expanding businesses so that they can ultimately take the business public via an IPO or sell the business for a substantial earnings multiple. There is not a single business that does not face any type of specific business risk that should be addressed within your business plan. You should showcase, within your business plan, how you’ll deal with an economic recession as it relates to remaining profitable and cash flow positive. The primary difference between private investors and venture capital firms is that these individuals tend to live in areas where there are a number of other high net worth individuals. In some instances, you may be able to finance your business through credit card receivables if you’re already in operation as an alternative to expensive equity capital financing.

Angel investors usually have a net worth of $500,000 to $1,000,000 although this number may be higher in selected metropolitan areas. It should be noted that venture capital firms will typically take 30 days to 60 days to make a decision as it relates to the capital that you need. Most angel investors are prepared to make their investment decision within two weeks of receiving your proposal. In any document that is specific for a angel investor or venture capital firm should have appropriate disclosures as it relates to the risks associated with business which should be drafted by an attorney. When you’re developing your business plan for an angel investor or venture capital firm, it is extremely important that you dismiss your emotions in the product or services that you is that you sell.

We recommend that you have your attorney present during your first meeting in order to make sure that the individual is a legitimate investor or venture capital firm that is willing to make a significant investment into your business. It should also be noted that there are firms out there that can introduce you to angel investors or syndicated individual investment groups when you are seeking private equity capital.

The primary difference between an individual investor and a venture capital firm is the amount of capital that they are willing to provide you with as it relates to making an equity investment into your firm. As such, if you are seeking less than $5,000,000 then it may be in your better interest to work with an angel investor rather than a large scale investment firm.

Matthew Deutsch is a prominent business plan writer. His work has been included in nine books pertaining to this subject. Additionally, Mr. Deutsch has written extensively on subjects regarding entrepreneurship, small business lending, angel investing, and other related topics.

There are several potential financing options available to cash-strapped businesses that need a healthy dose of working capital. A bank loan or line of credit is often the first option that owners think of – and for businesses that qualify, this may be the best option.

In today’s uncertain business, economic and regulatory environment, qualifying for a bank loan can be difficult – especially for start-up companies and those that have experienced any type of financial difficulty. Sometimes, owners of businesses that don’t qualify for a bank loan decide that seeking venture capital or bringing on equity investors are other viable options.

But are they really? While there are some potential benefits to bringing venture capital and so-called “angel” investors into your business, there are drawbacks as well. Unfortunately, owners sometimes don’t think about these drawbacks until the ink has dried on a contract with a venture capitalist or angel investor – and it’s too late to back out of the deal.

Different Types of Financing

One problem with bringing in equity investors to help provide a working capital boost is that working capital and equity are really two different types of financing.

Working capital – or the money that is used to pay business expenses incurred during the time lag until cash from sales (or accounts receivable) is collected – is short-term in nature, so it should be financed via a short-term financing tool. Equity, however, should generally be used to finance rapid growth, business expansion, acquisitions or the purchase of long-term assets, which are defined as assets that are repaid over more than one 12-month business cycle.

But the biggest drawback to bringing equity investors into your business is a potential loss of control. When you sell equity (or shares) in your business to venture capitalists or angels, you are giving up a percentage of ownership in your business, and you may be doing so at an inopportune time. With this dilution of ownership most often comes a loss of control over some or all of the most important business decisions that must be made.

Sometimes, owners are enticed to sell equity by the fact that there is little (if any) out-of-pocket expense. Unlike debt financing, you don’t usually pay interest with equity financing. The equity investor gains its return via the ownership stake gained in your business. But the long-term “cost” of selling equity is always much higher than the short-term cost of debt, in terms of both actual cash cost as well as soft costs like the loss of control and stewardship of your company and the potential future value of the ownership shares that are sold.

Alternative Financing Solutions

But what if your business needs working capital and you don’t qualify for a bank loan or line of credit? Alternative financing solutions are often appropriate for injecting working capital into businesses in this situation. Three of the most common types of alternative financing used by such businesses are:

1. Full-Service Factoring – Businesses sell outstanding accounts receivable on an ongoing basis to a commercial finance (or factoring) company at a discount. The factoring company then manages the receivable until it is paid. Factoring is a well-established and accepted method of temporary alternative finance that is especially well-suited for rapidly growing companies and those with customer concentrations.

2. Accounts Receivable (A/R) Financing – A/R financing is an ideal solution for companies that are not yet bankable but have a stable financial condition and a more diverse customer base. Here, the business provides details on all accounts receivable and pledges those assets as collateral. The proceeds of those receivables are sent to a lockbox while the finance company calculates a borrowing base to determine the amount the company can borrow. When the borrower needs money, it makes an advance request and the finance company advances money using a percentage of the accounts receivable.

3. Asset-Based Lending (ABL) – This is a credit facility secured by all of a company’s assets, which may include A/R, equipment and inventory. Unlike with factoring, the business continues to manage and collect its own receivables and submits collateral reports on an ongoing basis to the finance company, which will review and periodically audit the reports.

In addition to providing working capital and enabling owners to maintain business control, alternative financing may provide other benefits as well:

• • It’s easy to determine the exact cost of financing and obtain an increase.
  • Professional collateral management can be included depending on the facility type and the lender.
  • Real-time, online interactive reporting is often available.
  • It may provide the business with access to more capital.
  • It’s flexible – financing ebbs and flows with the business’ needs.

It’s important to note that there are some circumstances in which equity is a viable and attractive financing solution. This is especially true in cases of business expansion and acquisition and new product launches – these are capital needs that are not generally well suited to debt financing. However, equity is not usually the appropriate financing solution to solve a working capital problem or help plug a cash-flow gap.

A Precious Commodity

Remember that business equity is a precious commodity that should only be considered under the right circumstances and at the right time. When equity financing is sought, ideally this should be done at a time when the company has good growth prospects and a significant cash need for this growth. Ideally, majority ownership (and thus, absolute control) should remain with the company founder(s).

Alternative financing solutions like factoring, A/R financing and ABL can provide the working capital boost many cash-strapped businesses that don’t qualify for bank financing need – without diluting ownership and possibly giving up business control at an inopportune time for the owner. If and when these companies become bankable later, it’s often an easy transition to a traditional bank line of credit. Your banker may be able to refer you to a commercial finance company that can offer the right type of alternative financing solution for your particular situation.

Taking the time to understand all the different financing options available to your business, and the pros and cons of each, is the best way to make sure you choose the best option for your business. The use of alternative financing can help your company grow without diluting your ownership. After all, it’s your business – shouldn’t you keep as much of it as possible?

Tracy Eden is the National Marketing Director for Commercial Finance Group (CFG), which has offices throughout the U.S. and Canada. CFG provides creative financing solutions to businesses that may not qualify for traditional financing. Visit http://www.cfgroup.net or contact Tracy at tdeden@cfgroup.net.

Joint venture businesses are composed of two or more companies, groups or individual businessmen or businesses. The join each other to create a much better or a new business line, hence the name joint. Today, a lot of businesses have been joint venturing with other businesses and companies for numerous benefits. Although the benefits are obvious, there are still some disadvantages when joint venturing.

Joint venture has lots of benefits; one of the most obvious is that you can survive financial crisis or depression because your venture partners can absorb some of your financial crisis to retain the company in shape. Usually this venture is being done to eliminate some or totally eliminate the competition to achieve a monopolized market for your business.

Another reason for businesses to have a joint venture is to have a different line or target market. This is to enable the company, usually a much bigger one, to target other market other than their present market. This enables the company to enter a new line of business and learn more about the products that they are going to create from their joint partners. This is very beneficial especially for those companies that jointed with other companies that have trade secrets or patented products and intellectual properties. They can now gain access to this valuable information that could help them and their partners expand their business.

Upon entering a new market, this venture not only allows the other company to enter and penetrate the market of the other, it also helps the other companies’ capabilities with handling the market. This makes the company a much bigger and better competitor if not the best in their specific market. Giving them full and great access and flexibility with their target market.

Joint venture capital also helps the company grow faster. This is because of the number of business lines that they have. This enables them to profit from different markets. For the part of the company that a market fails, the total failure is being absorbed by the entire venture capitalists. This works equally the same by the time they gain profit.

Although there are numerous advantages of joint venturing, there are some disadvantages too. One is that if your business partners were not as productive as your business. This will become a drag for you since you will equally share and endure the drawback of the other business. Another is you will have to share all the information that you have to your partners. And finally, if your business partners are not as effective or work efficient as you are. This may affect the management area of your business and may result to lower success of success. Besides that the power to govern your business is no longer solely to your company, but for the whole joint ventured companies.

Overall, joint venturing is a nice thing to do if you plan on expanding and growing your business much faster and if you intend on having different lines of market. Just a simple reminder, learn more about the partners you are going to have your joint venture. Choosing the right business or company can lead to success and vice versa.

Contact us for more information on a host of additional services.

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Venture capital firms are different from private investors in that they have raised capital from a number of high net worth individuals with the intent to make investments on their behalf into promising start up companies and expanding businesses so that they can ultimately take the business public via an IPO or sell the business for a substantial earnings multiple. There is not a single business that does not face any type of specific business risk that should be addressed within your business plan. You should showcase, within your business plan, how you’ll deal with an economic recession as it relates to remaining profitable and cash flow positive. The primary difference between private investors and venture capital firms is that these individuals tend to live in areas where there are a number of other high net worth individuals. In some instances, you may be able to finance your business through credit card receivables if you’re already in operation as an alternative to expensive equity capital financing.

Angel investors usually have a net worth of $500,000 to $1,000,000 although this number may be higher in selected metropolitan areas. It should be noted that venture capital firms will typically take 30 days to 60 days to make a decision as it relates to the capital that you need. Most angel investors are prepared to make their investment decision within two weeks of receiving your proposal. In any document that is specific for a angel investor or venture capital firm should have appropriate disclosures as it relates to the risks associated with business which should be drafted by an attorney. When you’re developing your business plan for an angel investor or venture capital firm, it is extremely important that you dismiss your emotions in the product or services that you is that you sell.

We recommend that you have your attorney present during your first meeting in order to make sure that the individual is a legitimate investor or venture capital firm that is willing to make a significant investment into your business. It should also be noted that there are firms out there that can introduce you to angel investors or syndicated individual investment groups when you are seeking private equity capital.

The primary difference between an individual investor and a venture capital firm is the amount of capital that they are willing to provide you with as it relates to making an equity investment into your firm. As such, if you are seeking less than $5,000,000 then it may be in your better interest to work with an angel investor rather than a large scale investment firm.

The other day, I was talking with an individual, a seasoned entrepreneur looking to raise a little capital for his next business, and he noted that he only needed a little bit of startup money to get the prototypes going, to prove concept, and to start making money.

Yes, perhaps so, and perhaps not, but how can he come up with the money if he doesn’t have family members to fund it or any money of his own to invest? Okay so let’s talk a little about this case study, perhaps you are in the same boat as a small time entrepreneur?

Entrepreneur says: “I have a manufacturer and sources lined up to make these devices, and it doesn’t cost that much to make them, and I also have beau coups contacts to get them into the market, so I can be launched and operating for very little money.”

Still, contacts are not commitments. Sources are not firm guaranteed delivery. How much, do you have a rough plan? Go ahead and copy it into an email so I can read it. If it is really cheap, you could try the “micro-funding” online sources where folks can chip in small amounts – crowd source type funding, but you’d still need a strong business plan and go get real money to really make this vision happen. What are your thoughts on the crowd source funding concept, I was asked?

Well, here are some of my thoughts, you see first off; Hope and Change are BS right? I mean you have to make it happen, that means “step 1” is still only “step 1” and is no guarantee you can get to the real goal of creating a viable business that will launch these products into the market.

Now then, should you go the crowd sourcing route, does it make sense, is that a good way to raise funds? Well, it can be, and it has worked for some folks, of course a nice business plan helps, but then at the same time you are giving away your idea to the whole world, and describing your invention, innovation, or business model to entrepreneurs, foreign imitators, and others who will merely steal your concept.

But, if you can get your funding and go to step one, quickly, complete that, and get a second round of funding to keep going at a fast pace, it could work, and yes, people have done it, and it is one source of funding. So, please consider all this and think on it.

Lance Winslow has launched a new provocative series of eBooks on Business Subjects. Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank; http://www.worldthinktank.net

An effective way to receive the venture capital that you need is by selling your business to the venture capital (VC) firms. But of course, you should never approach those venture capitalists empty handed. Keep in mind that VC firms will have to evaluate the viability of your business, first based on your business plan and second from your business pitch. More importantly, VCS are more likely to venture with you if they see these four important qualities in your business: disruptive technology, potential for fast growth, well-rounded business model, and top performing management team.

Supposed that you have managed to meet those four qualification criteria, your next task is to curate the negotiation process between your company and the VC firm. Present your business plan putting more emphasis on the profit generation aspect. Also remember that VCs would only give you that venture capital fund if you are going to share with them a slice of the pie – or a percentage of your equity. Therefore, you have to be wary of the terms and conditions being proposed by the VC firm for that could affect your control over your business in the long run.

The rule of the VCs is simple: If you accept our offer, you can have that venture capital fund. Your goal should be simple as well: Receive a good offer. And to achieve it, here are the important matters that you need to prepare.

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Write your business plan well.

Starting a business is difficult but so is writing a business plan. All the transactions, events, projections, assumptions, and SWOT of your business, you need to put them in writing in such a way that it would convince the VCs to seed money. VCs want their money back doubled, tripled or more in the span of 3 to 7 years. Knowing this, you have to show on your financial projections that you can at least break-even within the first or second year. The rest in your business plan is proving them that your business is worth the investment.

Justify your Capital Spending Plan and their Return on Investment (ROI).

While these money matters are already discussed in the business plan, VCs would want to hear you stating the same facts and figures in your ten minute business pitch. Expect drill-down questions like “Why three years for that ROI, why not two?” or be ready to give your best explanation when they tell you “What you’re asking is too much (or too little).” If you want to receive that venture capital, you have to be bold on your financial bets.

Focus on the growth of your business so they could find you.

Venture capital is a big industry. Venture capital funds are raised by venture capital firms from wealthy individuals, companies and private investors. Today, major players in this market don’t stop looking for startups and small businesses that could give them high returns. If they see your business selling high, they will approach you to offer the venture capital funds. So idea here is this: Make your business shine so that the VCs could easily find and back you.

Sell your business with full confidence.

A real entrepreneur knows his business more than anybody else. Whether you’re a startup or a company ready to launch your IPO next month, you can receive that venture capital if you will sell your business with high level of entrepreneurial skills. Once you’re in front of the VCs, consider it your first and last pitch. So give it all your best to get their best venture capital offer.

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Entrepreneurs who want to raise finance for their business will have to begin with an outstanding business idea in order to convince their investors to raise finance for them.

You should not focus on one aspect only. Entrepreneurs need to understand what the investors really want, especially if you are into venture capitalism. Here is a T.I.P. for you: You need to have a TEAM, an IDEA, and a Business PLAN.

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1. Your TEAM.

The best business ideas come from a team that can execute the plan and actualize the goals. You can have greater convincing power if you have a talented, experienced, and team instead of being a lonely entrepreneur.

You should also consider your team members to have some form of financial commitment. In other words, you should consider family and friends as your first investment pitch. Investors simply want to know that when the hot, steamy stuff hits the fan, each of the team members have more to lose than just their time spent and energy.

2. The IDEA.

Investors in Venture Capitalism are looking for a sure return on their investment that is substantial enough to compensate for the many other losing ventures they will back. Venture Capitalism involves high risk of failure especially for start ups, and they want to hear a business idea that shouts significant growth potential.

You may want to ask yourself, is your business idea big enough? Can your idea be turned into a franchise? Or, Can your idea last long enough to be a license, Can you find ancillary products or strategic partnerships for your new product idea?

3. Your Business PLAN.

Entrepreneurs should be able to give a detailed and smooth presentation of how the IDEA will become a business opportunity that is worthy of investment. Lay out a clear strategy of how you and your TEAM will actualise your current strategy. Make sure to demonstrate your knowledge and capabilities in the market.

Always remember that you don’t have to be alone in venture capitalism. You can start by contacting the investor directly and inquiring what they want to see. They can give you priceless recommendations during your initial meeting.

You also have your friends, family, fellow entrepreneurs, and mentors who would be willing to listen to you, advise you, and give feedback as you gather your TEAM, develop IDEA and formulate PLAN.

These people and the T.I.P. can help you decide whether to push or pass on the investment. You will get the chance to refine your approach and be ready to finally deliver your pitch.

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