One of the primary duties of an entrepreneur is to continuously raise capital for his or her business. But what happens when that business is still in its startup stage? How will an entrepreneur raise capital for a new small business startup? I intend to use this article to reveal the fundamentals of raising capital for your business.
"Thought, not money is the real business capital" - Harvey Firestone.
If you are a first time entrepreneur seeking to raise capital for your small business startup, then read on as i share with you 12 avenues you can ply to raise capital for your small business startup. If one fails to yield result, you can try another.
Before proceeding to raise capital for your business, i want to clearly state that there are
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Friends
The next avenue you can ply to raise capital for your small business startup is to approach your friends. One thing with seeking capital from friends is that they (your friends) might want to come on board as partners. One more thing, your credibility will be a determining factor to your success with raising capital from friends.
3. Angels
Angels are rich individuals that have resolved to use a portion of their wealth to support young entrepreneurs and small business startups. All you have to do is fit into the criterion set by the angel investor and you will see your startup funded, provided you have a bankable business idea backed by a strong plan.
4. Entrepreneurship Supporting Banks and Institutions
Your business startup can also be provided with capital by entrepreneurship supporting banks or institution. Some banks and institutions usually set apart funds to support entrepreneurship. Their terms are usually flexible; these institutions or banks usually request a stake in the new venture and whereby a stake is not requested, they may grant the small business startup a longer repay period.
5. Private
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Suppliers
Just as the case of raising capital from customers, you can also apply the same tactics on suppliers by seeking supply in advance.
12. Investment Bankers
When all avenues have been exhausted, you can approach investment bankers to provide you with the capital you need. They have the capacity to raise capital for you from the general public. But for this approach to be successful, you must be willing to give up ownership and sell some stakes to the public through an IPO.
As a side note, you can also raise capital for your small business by undergoing Reverse Merger. Reverse Merger is simply the process of merging your business with a publicly quoted company.
In conclusion, i want to send a message across that raising capital should not be a night mere as touted by some. Raising capital is all about creativity. Once you have the right plan, you will surely find the money no matter how long it takes. Disappointments are bound to surface but you must refuse to be discouraged by these setbacks. At this point i leave you with these quotes:
"The size of your success is measured by the strength of your desire, the size of your dream and how you handle disappointment along the way." - Rich
Does he need to raise money, and if so how much? Yes, it was necessary for Mr. Wooten to raise money if he wanted his business to survive. In my opinion, he needed capital to sustain for at least 36 months. It means 36 months x $50K = $1.8 million.
Aside from the loan programs mentioned above, there are many others available for prospective entrepreneurs. As the country 's economy slowly rises out of the shadows of recession, this is exactly the kind of assistance small businesses need to succeed and prosper. Now, which types of SBA financing programs appeal most to your entrepreneurial preference?
3-33. While franchise owners must have at least $125,000 of cash available, average startup costs are more then double this amount. What are the most likely sources of funding a franchise?
2.in other case, if he thinks of starting this business as a broader venture , he needs to raise capital
To support their growth and offset portfolio losses by their venture capital investors, management was ready to raise additional capital through a public equity offering.
launch the stock price of this company, and incentivize new investors to lend shares for new capital.
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¨Don't worry about being successful but work toward being significant and the success with naturally follow.¨ - Oprah Winfrey. Oprah was a strong opinion great women. Oprah Winfrey was famous for her great wealth, many accomplishments, and along and still continuing career.(Edberg, Henrik)
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Business involved by two or more members of the family and is owned within the family is the simplest way to define family business. In this type of business the positions in the company is filled according the family blood. The founder of the business is usually the skull of the company, the rest of the positions are taken place by the family member which are usually higher positions where else other positions are filled by non family members.
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Studying Banking and Finance at University of St.Gallen will help me further increase my proficiency in corporate finance and financial markets. The in-depth research of specific topics, as well as a comprehensive curriculum, is a possibility for me to focus on my topic of interest – the mechanisms and institutions involved in providing venture capital and identifying angel investors as means to encourage innovation.... ... middle of paper ... ...