| Often entrepreneurs will be in the process of building | | | | think you may need some friends and family capital in |
| their businesses and suddenly be struck by a need | | | | the future, ask your potential candidates to sit on |
| for cash. The business wins a big contract or general | | | | your advisory board. You get their advice and allow |
| growth has increased in speed. On the down side, | | | | them to see you in action. Additionally, you get the |
| the slower economy slows sales growth or | | | | experience of working with them, which may lead |
| customers slow down their payable cycle. Either way, | | | | you to decide that you would not like them to be an |
| this is not the time to go looking for capital. | | | | owner in your business. |
| If you ever believe you may need capital, the time | | | | If you are interested in venture capital, make it a |
| to start the process is now, be it debt or equity. | | | | point to get to know some venture capitalists. |
| Take the time to get to know your banker. If you | | | | Although reputed to be stand-offish, they are most |
| bank at a large bank, such as Bank of America, get | | | | afraid you are going to ask them for money. If you |
| to know the local branch manager. Find out how they | | | | are just networking, many VCs will be thrilled to |
| process business loans. If there is a local loan officer, | | | | meet with you and give you advice and the benefit |
| ask to meet with him or her. Find out what the | | | | of their experience. |
| lending standards are. | | | | You can start with networking events put on |
| Large banks may allow the branch to approve loans | | | | through your local technology council (or similar state |
| up to a certain amount. Higher amounts may be | | | | city entrepreneurship group). You might try |
| kicked up to the regional or corporate offices. It | | | | presenting at a venture forum. This gives you both |
| would be a shame if you were denied a $60,000 loan | | | | practice and gets your name into the venture |
| by a corporate office, but you could have gotten a | | | | community. Volunteer to be a mentor in local |
| $50,000 loan approved by the local branch. | | | | entrepreneurship organizations. They often hold group |
| Finding a smaller local bank that focuses on | | | | meetings and you will get the chance to meet VCs |
| commercial accounts will also improve you chance of | | | | on an equal footing. |
| getting a loan. You can get to know the lending | | | | Getting a bank loan can take four to eight weeks |
| officer personally and keep them informed of your | | | | and raising venture capital can take six months to a |
| business on a regular basis. If you are meeting your | | | | year, sometimes more, so having your foot in the |
| expected revenue milestones, your lending officer will | | | | door can really help move the process forward. Don't |
| be more likely to believe your plan in the future. | | | | wait until you need money to start looking, it will be |
| Equity capital is also a relationship business. If you | | | | too late. |