| Many starting out in business don't realize that that | | | | may have to give up 25%-75% ownership of the |
| there are more than 20 funding sources available to | | | | company. This is usually depending on the nature of |
| get the money needed to fund a business vision, idea | | | | the deal and what can be negotiated. Under Equity |
| or project. The sources are broken down into two | | | | Financing you must also be aware that there are |
| main groups, Bootstrapping and Equity Financing. | | | | Early and Later Stage Sources. |
| Bootstrapping is when you the Entrepreneur decide | | | | Equity Financing Early Sources |
| to go it alone using on the ground resources from | | | | 1. All Bootstrapping Early Sources |
| personal savings to second mortgages. Equity | | | | 2. Friends & Family |
| Financing is when you the Entrepreneur decide to | | | | 3. Angels |
| give up a percentage of the ownership of your | | | | 4. Angel Groups |
| company in exchange for needed capital. | | | | 5. Early Stage Venture Capital Firms |
| Bootstrapping Early Sources: | | | | Equity Financing Later Sources |
| 1. Founders' Capital | | | | 1. All Bootstrapping Sources |
| 2. Savings | | | | 2. Venture Capital Firms |
| 3. Credit Cards | | | | 3. Corporate Venture Funds |
| 4. Second Mortgage | | | | 4. Private Equity Firms |
| 5. Venture Leasing | | | | 5. Private Placement Firms |
| 6. Sales Revenue | | | | 6. Mezzanine Financing Firms |
| Bootstrapping Later Sources | | | | 7. Investment Banks |
| 1. Lines of Credit | | | | 8. Public Markets |
| 2. SBA Loans | | | | In order to make a sound financial decision make sure |
| 3. Asset Backed Lending / Accounts Receivable | | | | your Business Plan is strong and paints an accurate |
| Factoring, etc | | | | picture of your business idea or project. Proformas |
| 4. Corporate Strategic Partnerships | | | | and Valuation of the business must be honest and |
| 5. Banks that Lend To Start-Ups | | | | realistic. Angel investors and Venture Capitalist are |
| 6. Government Grants (e.g SBIR, DARPA) | | | | only going to back ideas and companies that are |
| 7. Company Earnings | | | | going to surrender the safest and strongest (ROI) |
| Under Equity Financing, depending on the source one | | | | return on their investment. |