| We have compiled a list of some practices which | | | | newspaper or a national publication featuring such ads. |
| seem sure to kill your chances to attract investors. | | | | State the amount of money requested, the type of |
| Ignore these lessons at your peril. | | | | business involved, and the kind of return being |
| * Poor market research, weak business plan | | | | projected. |
| * An unfocused, "shotgun," approach to which | | | | Investment "party." Give a party to explain to friends |
| venture capital sources to approach | | | | your business plan, the profit potential, and how |
| * Does not have enough seed capital dedicated to | | | | much you need. Give them each a copy of your |
| the capital raising effort | | | | prospectus and ask that they pledge a thousand |
| * Does not allow ample time for raising the capital | | | | dollars as a non-participating partner in your business. |
| * Seeks too much capital, or sets too large a | | | | Check with the current tax regulations. |
| minimum initial investment for the project or | | | | Occupational investment groups. The next time you |
| company. | | | | talk with your doctor or dentist, give them a |
| * Does not have enough of their own capital | | | | prospectus and explain your plan. They may invest or |
| committed to the project. | | | | perhaps make an appointment for you to talk with |
| * Does not have a clear picture on the use of | | | | the manager of their investment group. |
| proceeds. | | | | Non-Profit assistance groups. Many areas have Small |
| * Does not have a rate of return projected on the | | | | Business Investment Companies, and Business |
| investment | | | | Development Commissions whose goal is to assist in |
| * Does not guarantee an exit strategy for the | | | | the establishment and growth of new businesses. |
| investor | | | | Many offer money or facilities to help a new business |
| * Does not have a solid management team put | | | | get started. |
| together | | | | Money brokers. These circulate your prospectus to |
| Even when early funding is secured, the entrepreneur | | | | various known lenders or investors. They generally |
| can make strategic errors that make follow-on | | | | require an up-front or retainer fee, then take a |
| investment less likely | | | | percentage of the gross amount that's finally |
| * Does not raise sufficient capital early enough in the | | | | procured for your needs. There are no guarantees of |
| game. | | | | success. |
| * Engages in spending capital before adequate capital | | | | Strategic partners. Consider the feasibility of merging |
| is secured. | | | | with a company that's already organized, and with |
| Denied traditional routes to venture funding, many | | | | facilities that are compatible or related to your needs. |
| entrepreneurs will turn to techniques that are often | | | | The person with determination to succeed, will make |
| called "guerilla" financing: | | | | use of every possible approach. |
| Business Opportunity ads. Place advertising in a local | | | | |