It is only natural that the first and only worry of young entrepreneurs is funding. We give you here a few ideas on how to make seeking funding an easier endeavor for you.
Young entrepreneurs can opt to get funding from private sources. Venture capitalists constitute an attractive source of funding for those who have creative and innovative ideas for a business. Venture capitalists will give you funding in exchange for shares of your company. Venture capitalists get a return on their investment after selling their shares at a higher cost than the one they paid for them. They give their expertise so that your company will flourish so that the shares become more profitable.
Venture capitalists may invest up to millions of dollars in a company when they think the idea is worth it. Because of this, they often choose ideas in very specific fields where they either have expertise in or special interests. They often act as organizational coaches and participate closely on the decision making process.
Venture capitalists and entrepreneurs will see more benefits of their alliance when they work together and in harmony. For this to happen, there needs to be agreement on the management and participation expectations. An owner may feel a little concerned about the intervention of venture capitalists in the decision making process. These types of concerns must be discussed from the get go.
Business angels as an option for funding.
A second option open to young entrepreneurs seeking funding is to look for business angels. This option is best for companies that require an investment of money less important, but an effective coaching beyond their financial support. Business angels (often former entrepreneurs or venture capitalist) use their network and their professional know-how to encourage the growth of a business.
Business angels share the network of contacts and their know-how with the young entrepreneur. This may make a substantial different in the life of a business that otherwise will be new to the market and would have to learn things the hard way. That is why their participation is so invaluable.
In conclusion, if they wish to prosper alongside investors, entrepreneurs must avoid thinking of their society as their baby. They must agree to share power, like the big companies, where shareholders have a say in management for the money, but also for the skills they bring. Investor may therefore play a decisive role in the growth of a start-up. However the entrepreneur must not forget that even if he or she shares some of the power, he or she remains the owner.
Wade Henderson – recognized Professional – 15 yrs in the Business Finance Field – strong reputation for getting the deal done. IMMFinancial.com IMM Project Finance, IMM Leasing