Small Business Capital
What is "business capital"?
Business capital is money that you use for your business. I mean, it's just money. That's all, it's all just money. Now, you need to know exactly how much you need and what you're going to do with it, and for that you need a business plan.
How do I search for business capital?
One source of business capital is you. You've got money yourself or your credit cards allow you to borrow certain amounts. It really depends on how much you need. Say you need ten million dollars; my credit card won't cover that and I don't have ten million dollars, but, really, that's one. Friends or relatives are all sources of money and you really should probably consider them first. You can consider a loan, and of course, loans have to be repaid. You can get those from your bank sometimes. Again, what do you need? You need a business plan. With the SBA, Small Business Administration, the first thing they want to know is 'do they have a business plan?' They may even recommend the outline of a business plan that they use. I think I mentioned venture capitalists already, although I'll cover the issue again. Venture capitalists want to participate in ownership. If you have to sell part of your business, how much are you willing to sell and are you willing to give a controlling interest to someone else? In other words, a venture capitalist will typically want a controlling interest which means that when push comes to shove, they have the right to say, “Hey. I own most of your business.” So, there are all kinds of factors like this you want to consider.
What is "venture capital"?
Venture capital is where you get your actual venture capital companies. They invest and start up, but are also companies that have been running for a little or a long time so they have a track record. They acutally buy some of your company and probably a controlling interest. In other words, 51%, and that is one of the disadvantages. In other words, you just have to understand that. It may be very beneficial for you to have this because at that point in your company's life, you want to grow and you need the money to do this. But if they invest, the venture capital countries want to own your company. They want to make sure they own enough venture capital to make the decisions. Now they rarely exercise that. But still, they do have the right to do that, as they do have controlling interest in your company.
How do I find venture capital?
There are a lot of different ways to find venture capital. Going on the internet is an easy way nowadays to do that. There are some people who sell CDs with venture capital companies on them and there are books under publication on it. Go to the Net, punch in “venture capital”, and you'll get more sources than you ever dreamed of.
How can I get a venture capitalist to finance my company?
When it comes to small business capital, you just have to have a business plan to get a venture capitalist to finance your company. It's critical and that's why it's so important, you put so much of yourself into this that they'll want to look at the business plan again. A venture capitalist who will finance your company wants to minimize their risk; they don't want to take the risks associated with a company just because you have a good idea. So, if you have a track record of some sort, that's very, very beneficial to venture capitalists. That goes back to the business plan, and goes back to your background. In other words, even if this business is a new business, if you have a track record in this area and industry this is sometimes very good.
