Ways To Raise Funds For a Small Business

Forgive potential investors for being skeptical of tossing you their spare change for your business proposition in this post-Madoff world. Banks aren’t exactly waving small-business loans in your face these days either, so what’s someone with a great new business idea to do?

The Big Money is here to help with a how-to guide on Reuters about scrounging up financing for a start-up.

The author is Jonathan Weber, who has been raising funds to expand NewWest.net. He says venture capital and initial public offerings are so hard to come by these days that you may be better off just begging your rich uncle for money:

Former colleagues or mentors can often be excellent prospects; good angels are usually invested in you as much as your business plan. I’ve also found that angels are very sensitive to who else is a part of the deal, so if you can get one person with a good reputation to sign on, it will be a much easier road from there. A pretty common level of commitment for an experienced angel investor is $25,000 to $50,000, though some angels will do as much as several hundred thousand.

Using your own credit to secure loans and hitting up state and local small business development organizations are also options.

Or you could always just panhandle like the guy in the photo. What he lacks in college sports team tastes he makes up for with a concise, effective pitch, a winning personality and a compelling business proposition.

The ABCs of Raising Money [Reuters]
(Photo: scentzilla)

Comments

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  1. Wombatish says:

    I recently bought a “share” of a small (but feature length/real in all the senses that count) film being made by a small ‘business’ (production company), and the whole experience has left me with some very interesting and positive things to say about the power of fund raising and a good cause/good people behind a good cause.

    I would include links to the project but I don’t want to shamelessly promote. Needless to say it made it’s way around the web, so it -is- probably what you’re thinking.

    • Eyebrows McGee (now with double the baby!) says:

      @Wombatish: No, please, link, because I’m thinking, “what?”

      • Wombatish says:

        @Eyebrows McGee (now with more baby!):
        This is the “pitch”:
        [www.lobsterback.com]

        This is the movie’s site:
        [www.lobsterback.com]

        They have a nice sound investment plan and then a nice link on a few webcomics/blogs I read (Ctrl-Alt-Del probably being the most prominent) got them 18,000 dollars in just a few days.

        • Wombatish says:

          @Wombatish: Yeah, sorry, I wrote that after an all-nighter and it’s pretty bad grammar wise.

          Anyway.. I didn’t want to link them because I didn’t want it to seem like I was saying “give these people money”. I’m not, just for the record.

          I liked that there’s a pretty solid chance for a return of at least your investment, and that it seemed like they cared about their investors (you’re encouraged to ask for updates/visit the set with permission), and that it’s a father and daughter making a movie because they love movies and think they have a really good story (I agree).

          It’s not traditional venture capital/small-to-medium business investment, but I think it works quite well regardless.

    • YOXIM says:

      @Wombatish: You sly fox you! I see what you’re doing there! You want to pique my curiosity with your open ended statements. Well, sir, mission accomplished! Now come forth with the title or I shall have to take drastic measures, (begging, crying, etc)…

    • Kaellorian says:

      @Wombatish: lolcats made a movie?

  2. pot_roast says:

    Rich uncle? Wow. I’d be happy if I could just find a job these days. :|

  3. HIV 2 Elway says:

    Nice cap on that guy, Go Ducks.

  4. justbychance says:

    @Wombatish:

    Agreed… after all sharing is caring.

  5. The Porkchop Express says:

    @Kaellorian: I was thinking…Two Girls One Cup: The Movie.

    I’d rahter see lolcats the movie though.

  6. DreamTheEndless: Death's little brother says:

    No – forget the ducks….
    Go Beavers!!

  7. Granolaheadesq says:

    Really, Dipshit? Let’s check the facts on this Villarreal character…let’s look at the respective records since I was a Duck and he was one of the big wild pussies at AU.

    Nov 09, 1996 Arizona @ Ducks 49 – 31(W)
    Sep 04, 1997 Arizona @ Ducks 16 – 9 (W)
    Oct 31, 1998 Ducks @ Arizona 3 – 38 (L)
    Oct 23, 1999 Ducks @ Arizona 44 – 41 (W)
    Oct 21, 2000 Arizona(21)@ Ducks(9) 14 – 10 (W)
    Oct 06, 2001 Ducks(6) @ Arizona(UR) 63 – 28 (W)
    Oct 05, 2002 Ducks(9) @ Arizona(UR) 31 – 14 (W)
    Sep 13, 2003 Ducks(UR) @ Arizona(UR) 48 – 10 (W)
    Oct 16, 2004 Arizona(UR)@ Ducks(UR) 28 – 14 (W)
    Oct 22, 2005 Ducks(15) @ Arizona(UR)28 – 21 (W)
    Nov 18, 2006 Arizona(UR)@ Ducks(UR) 10 – 37 (L)
    Nov 15, 2007 Ducks(2) @ Arizona(UR) 24 – 34 (L)
    Nov 15, 2008 Arizona(UR)@ Ducks(24)55 – 45 (W)

    Ducks are 10-3 against you. Suck it.

  8. superberg says:

    Angels, eh? Let’s not inflate egos any more than we have to, people.

  9. groverexploder says:

    Dude does not look hungry. False advertising EECB, anyone?

  10. shocking says:

    Apart from SBAs, which are excellent resources for small business owners, domestic micro lending has ballooned in the past couple of decades. I’ll happily plug for the organization I’m currently working with (ACCION USA) and its partners and affiliates (CAMEO, Opportunity Fund, Kiva, ACCION Chicago, ACCION Texas, ACCION New Mexico), because I am convinced of the value in its operation. AUSA (and other domestic micro lenders) charge moderate interest rates and provide financial counseling in addition to loan services. They can be a fantastic resource for small business owners with strong credit. Yet because our business loans are personally guaranteed (reported to all three credit bureaus and dependent upon personal finances), they are not for everyone-we wouldn’t want to jeopardize the financial health of our operations or any of our clients by lending imprudently. However, application is free, and all small business owners should seek out ACCION USA for the opportunity of securing a valuable line of credit to strengthen their business. Please visit us at http://www.accionusa.org!