| Often the media portrays the best source of capital | | | | tap into debt sources because they don't want to be |
| for a start-up company to be venture funding. | | | | burdened with the debt if the enterprise fails. |
| Therefore, many people think that venture funding is | | | | However, if you don't believe in the company enough |
| the only source of start-up capital. Not only is this not | | | | to place your own credit behind it, why should |
| true, but often at the earliest stages, an investment | | | | anyone else. |
| from a venture capital firm means a huge loss of | | | | If you are looking for less than $1 million, tap into a |
| equity. There are a significant number of other | | | | local angel network. If you don't know any rich |
| sources of funding that an early stage company can | | | | people, find them. If you can't raise $1 million in angel |
| call upon, especially if the company is in the high-tech | | | | investment, your idea may not as good as you think... |
| arena. | | | | or you may not be the right person to sell it. Seek |
| If you are doing basic or pre-product research, take | | | | help through local business development agencies, |
| the time to submit for grants. Although this is time | | | | SCORE groups, or technology incubators. These folks |
| consuming and certainly not the fastest way to raise | | | | are all tied into the fund-raising network in the state. |
| money, the government and other grant funding | | | | Consider taking on contract work to fund your |
| agencies do not want ownership in your company. | | | | product development. If you have the right |
| SBIRs provide a six month phase I grant for | | | | equipment or people to handle small contracts on a |
| $100,000, followed by a significantly higher grant for | | | | part time basis, use this revenue as a funding source. |
| Phase II, from $500,000 to $750,000. If you apply | | | | Use creative means to keep your costs low. Join an |
| for and win two of these grants, you can get a | | | | incubator to take advantage of the services they |
| good start towards funding your company. | | | | offer for a lower price. Bartering is another great |
| If your company only needs a small infusion of cash, | | | | way get the use of space or equipment that would |
| you can get a SBA loan, or if you have a good | | | | be prohibitively expensive. |
| relationship with your bank, a line of credit. Also, a | | | | Part of being an entrepreneur is being creative. Use |
| bank will lend against your receivables, if your | | | | that creativity in financing your company and save |
| customer base is reliable. Many people are afraid to | | | | the venture capital for the growth stages. |