Raising $$$
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California Business Resource
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General Business Information
One of the most difficult part of starting a business or expanding a small business is raising the money that is needed for growth or expansion. This is because money doesn’t grow on trees, nor does it readily flow from investor pockets.
An analogy that has been often used is the sea turtle analogy. Raising funds for a start-up company is like the challenge that baby sea turtles face when they have to travel from their nesting place on the beach to the ocean, facing instant death from predators and the elements.
If you can’t write a check or go to the bank and get a loan, the obvious source of money is your friends and family. If this source isn’t available to you, you have to appeal to people you don’t know to get them to invest in your company. People who are willing to invest money in start-up companies are called “angels” because they are investing their money with the knowledge that the investment risk is very high. Angels are usually individuals who made their money in their own companies or at least have some of the same entrepreneurial spirit you have.
Venture capital companies, the source of money you hear most about, is probably not available to you. Venture capital companies are not considered angels because they will only invest in companies whose risk is lowered by such factors as (1) the company is already making money selling its product or service, (2) the company has a lucrative contract in place, or (3) the company is headed by someone who has a stellar track record of starting successful companies.
So how do you connect with angel investors?
There are many groups of angel investors. Most are informal and difficult to find, but some are organized. Here are a few:
Tech Coast Angels
Angel Capital Association
Funding Post
Angels Corner
Angel Capital Network
Go Big Network
Kieretsu Forum
Some of these will charge you before introducing you to any angel investors, some operate on commission, and some have no fees at all.
Your success will be directly tied to your ability to write a good story about your company and, when you actually make the contact with the potential investors, your ability to tell the story in person.
In most cases the organizations that charge will give you valuable guidance to help you prepare your story, so if you don’t have the slick business plan and presentation, it may be worth your investment just to get this advice.
Since telling your story in writing (also called a business plan) and in a presentation is so critical, you may want to seek help on this alone before attempting to talk to any investors.
You may be able to get this advice for free from organizations like:
S.C.O.R.E.
Connect Springboard
Start Up Nation
OC Business Consultants
Business Owners Idea Cafe
Small Business Administration
Once you have your story, you may want to try a more indirect route. Recently several exchanges have formed that attempt to put companies and investors together using a more open market approach-a little like eBay. Some of these are:
Second Market
Shares Post
Or you could try to appeal to investors by just publicizing your company. This is really indirect, but has worked for some companies. To do this for free consider:
Free Press Release
Twitter
Facebook
Good luck in getting your money!
Les Briney is a business, management consultant and is a Vice President at OFD Enterprises, Inc., he can be reached at les@ofdenterprises.com
An analogy that has been often used is the sea turtle analogy. Raising funds for a start-up company is like the challenge that baby sea turtles face when they have to travel from their nesting place on the beach to the ocean, facing instant death from predators and the elements.
If you can’t write a check or go to the bank and get a loan, the obvious source of money is your friends and family. If this source isn’t available to you, you have to appeal to people you don’t know to get them to invest in your company. People who are willing to invest money in start-up companies are called “angels” because they are investing their money with the knowledge that the investment risk is very high. Angels are usually individuals who made their money in their own companies or at least have some of the same entrepreneurial spirit you have.
Venture capital companies, the source of money you hear most about, is probably not available to you. Venture capital companies are not considered angels because they will only invest in companies whose risk is lowered by such factors as (1) the company is already making money selling its product or service, (2) the company has a lucrative contract in place, or (3) the company is headed by someone who has a stellar track record of starting successful companies.
So how do you connect with angel investors?
There are many groups of angel investors. Most are informal and difficult to find, but some are organized. Here are a few:
Tech Coast Angels
Angel Capital Association
Funding Post
Angels Corner
Angel Capital Network
Go Big Network
Kieretsu Forum
Some of these will charge you before introducing you to any angel investors, some operate on commission, and some have no fees at all.
Your success will be directly tied to your ability to write a good story about your company and, when you actually make the contact with the potential investors, your ability to tell the story in person.
In most cases the organizations that charge will give you valuable guidance to help you prepare your story, so if you don’t have the slick business plan and presentation, it may be worth your investment just to get this advice.
Since telling your story in writing (also called a business plan) and in a presentation is so critical, you may want to seek help on this alone before attempting to talk to any investors.
You may be able to get this advice for free from organizations like:
S.C.O.R.E.
Connect Springboard
Start Up Nation
OC Business Consultants
Business Owners Idea Cafe
Small Business Administration
Once you have your story, you may want to try a more indirect route. Recently several exchanges have formed that attempt to put companies and investors together using a more open market approach-a little like eBay. Some of these are:
Second Market
Shares Post
Or you could try to appeal to investors by just publicizing your company. This is really indirect, but has worked for some companies. To do this for free consider:
Free Press Release
Good luck in getting your money!
Les Briney is a business, management consultant and is a Vice President at OFD Enterprises, Inc., he can be reached at les@ofdenterprises.com