Put your small business financing proposal into the hands of investors who will welcome it
It's easy to get rejected
when looking for small business financing. In fact, 95% of the proposals
put out for funding DON'T GET FINANCED.
Only
5% of businesses looking for small business financing actually get it, whether from
angel investors, venture capital or traditional sources.
What do those few know that
you don't?
Are their businesses
better? Probably not.
Are their financials
better? Probably not.
Is their business plan
better? Probably not.
Unless you are an
experienced entrepreneur, odds are that you are doing what thousands of
other
entrepreneurs do: you look at "venture capital funding directories" and blindly send out your business plan.
As you have discovered, this just
doesn't work.
What the successful
companies know better than any others is this: There are very few
entities that will finance your company. Put another way:
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There are a limited number of ways to fund your
company.
Your job is to find the best
way.
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The
truth is that lenders and investors of all kinds NEED YOU.
They need new businesses, new ventures, new investment. That is how
they make money. Without you, they can't make money.
The
catch is that only a few of the thousands of possible
lenders/investors want your type of investment.
The
trick is to find those few, and as quickly as possible.
You can be part of that
pack, or you can distinguish yourself and your company by targeting
potential investors that most companies haven't even imagined.
TARGETING VENTURE CAPITAL FOR YOUR SMALL BUSINESS FINANCING
Lots of directories provide
general information, and some even provide a type of industry and size of
business. But no directory provides the inside scoop on targeting a venture
capital or angel investor firm. Here are some of the basics:
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Research the
dickens out of your potential venture capital firm. YOU choose
THEM. Don't wait for Them to choose you -- it won't happen.
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Look at other
companies in aligning industries. Who is funding them? Start
there. If you can get an introduction out of CEOs in the funded
firms, great. If not, approach the same investors anyway.
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Seriously consider
partnering with a large firm. There is a lot more money
in large corporations than these corporations would lead you to believe.
Go in through a Research or Marketing person -- that stand to win if you
company/product comes on board.
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Before you ever
make contact, make sure you know something about every single person you
are likely to talk with. For instance, know what school they went
to, or where they sit on boards of directors. Be able to have a
real conversation with them.
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Anticipate
what the investor will specifically want to know about your company ...
and deliver it.
All this is something that
professional money finders typically do -- and they charge many thousands
of dollars to do it.
And it is something that you
can do as well.
You will be amazed at how
easy it is to construct lists of real potential investors -- investors
looking for your kind of business, your size of company, your stage of
development, your industry ... investors that want to hear from you.
TARGETING
OTHER OPTIONS FOR YOUR SMALL BUSINESS FINANCING
Your investigation could pull
up many things that will help you in your search for small business
financing. For instance, you may discover that you really aren't
looking for venture capital at all. Many, many firms discover exactly
that. Be honest with yourself. Is that truly the best option?
Angel investors are increasingly becoming the
investors of first choice. They have tremendous flexibility in
The hardest part about angels
is that they are simply elusive characters. You may know some and not
even know that you know them. When looking for angel investors, check
with others in your industry.
And, yes, the SBA is a very viable option for
many, many companies looking for small business financing. Funding
options range from a few thousand dollars to millions, with all kinds of
training and support along the way.
There are a lot of other options for small
business financing. Look through the pages of this website for more
inspiration. Talk with others. Then take a look around.
You will be amazed at what you will discover.
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