| Money available to businesses from conventional | | | | number is seventy to eighty investors in each |
| banking sources has become very limited over the | | | | network. Instead of investing on their own in one |
| last year or so. At the same time the amount of | | | | business Angel Investors form a network allowing |
| private capital in the market has been increasing. | | | | them to diversify their investments. Venture capital |
| More and more business owners are finding it | | | | firms generally want a lot of control and a high rate |
| necessary to seek money from alternative sources | | | | of return, 20% or more, but these lenders often |
| such as venture capitalists and private investors. This | | | | take less control and require a lower rate of return. |
| type of capital is especially useful when starting a | | | | Private investors are looking for companies in which |
| new company. | | | | to invest, but they usually follow some strict criteria |
| There are several sources of private investment | | | | when choosing. In order to obtain money from |
| money. The largest sums of money comes from | | | | private investors you will need to have a good |
| venture capitalist firms. These group investors | | | | business plan and creative ideas. Private investors are |
| provide seed money for new or emerging companies | | | | looking for capital growth and revenue that is |
| in exchange for equity in the company. This is a good | | | | expected to increase over time as well as a good |
| source of capital for all types of businesses. The | | | | management. They may even take the background |
| venture capitalists will be looking for companies with | | | | and personality of the entrepreneur into account. The |
| a good idea, good business plans and a high potential | | | | more charismatic the entrepreneur and the more |
| for growth. These firms are large and often willing to | | | | belief they are able to convey in their business the |
| invest great sums of money in chosen businesses. | | | | more likely they will be able to obtain capital through |
| While most investment firms specialize in start up | | | | private investment. |
| money, many also provide mezzanine financing, or | | | | Obtaining private capital can be a complicated |
| later stage capital. | | | | process. Many venture capital firms and angel |
| Angel Investors are another source of private | | | | investors specialize in certain types of businesses. It |
| investment. They are a type of venture capital | | | | may be advantageous for a business owner to work |
| investor that consists of anywhere from ten to one | | | | with a broker to find the right firms to target when |
| hundred and fifty individual investors, but the average | | | | trying to raise capital. |