One of the most daunting tasks entrepreneurs face while starting a business is to raise the start-up or investment capital. In the yesteryears, entrepreneurs used to lure in investors by displaying fresh and new technological ideas. However, in today’s times, entrepreneurs have changed their idea of investment and try to invest from their own pockets. However, if you do not have the cash to invest in your own business, you need to search for an alternative. There are several options out there for finding the required funding for new companies but getting hands on the investment capital will certainly take a lot of research, outstanding negotiating skills, and a determined commitment for starting the new business.
You need to kick start your search for investment capital with a fine business plan which you can show to your potential investors and lenders in order to showcase the potential of your venture. Your business plan must be accompanied with the good knowledge of the resources that are available to you and should also showcase the determination of making your business a reality.
One important way of raising the investment capital is to go in for bank loans. The bank-qualified business owners can borrow a maximum of $150,000, which is a huge amount to start your business. Community banks are also an important source of procuring investment capital. The best part of raising capital through community banks is that they are quite flexible to meet the needs of entrepreneurs.
There is also the provision of microloans which range from a few hundred dollars to the low six figures. The recent trend that has picked up in the last decade is Venture Leasing, which is an important aspect to consider for fast-growth companies. Credit cards can also be used as the mainstay for the small-business owners.
Many entrepreneurs tap into personal ties in order to raise investment capital. Another alternative to loans or equity deals is to go in for asset sales to friends or relatives. Private equity has also become one of the eminent ways to get venture capital. One of the common forms of private equity is to go for performance-oriented, flexible terms. Redeemable preferred stock will also help entrepreneurs to raise capital during times of uncertainty. For the corporate who is seeking investment capital, you can look into the possibility offered by the wide world of the internet, which opens up the mixed bag of possibilities. Public equity has gained as much importance as the private equity. Investment or commercial-banking links are picking up in today’s tough economic times. Having the right contacts makes it quite easy to get hands on that investment capital. Capital intermediaries can help you a lot to raise capital and they are the best friend that a business can have. If you are looking forward to building financing contacts, then entrepreneurship programs can help you a lot.
In all, raising investment capital will not prove to be so difficult as long as you start off in the right direction.