The challenge for a new or growing business is to get the funding necessary. “You must be in business for two years”, or “you are not making enough money”, or the always popular “you missed a credit card payment three years ago”. These and other comments are all too common for those looking for financing help.
Paul Saunders, the CEO of James River Capital, knows what it is like to build a successful business. He also has many years of experience in helping new businesses find the funding needed to get their business started. Here are a few avenues that he suggests to entrepreneurs.
Check for Local Lenders Through Chamber of Commerce
Your local Chamber of Commerce can be a rich source of finding funding sources. As supporters of local business, they keep track of possible funding sources in their area.
Your Chamber of Commerce may direct you to your local business development center. These centers are connected with a local community college. They can help you prepare your financial information and write a business plan to present to funding sources.
You Can Pursue the Help of Angel Investors
Angel investors usually operate in groups that invest in a particular industry. Angel Capital Association is an online source that list over 300 groups of angel investors. By looking through this list, you can make a list of investors for your industry. You also can check with your local small business development center for groups in your region.
Angel investors will want to hear your pitch. They may make an investment in your idea and business. They also may give you a direct loan.
Crowdfunding is a Modern and Popular Way to Acquire Seed Money
You post your idea on a crowdfunding site. People have the chance to contribute to your business idea without expecting to be repaid. If a lot of people contribute to your idea, it could be an indication that you have a marketable business idea. If no one does, then you may want to pursue a different idea.
It is helpful to advertise your funding venture. Especially through social media, you can let people know what you are doing and link them to your crowdfunding page. Do your best to build excitement for your project.
For Large Projects, Consider Venture Capital
If you are seeking a million dollars or more of financing, consider seeking out the help of a venture capitalist. National Venture Capital Association is one place to start looking for one.
Since a venture capitalist would be investing a large amount of money, they expect a detailed business plan. They want the assurance that they will get their money back plus a good profit. Most venture capital investors are looking for a three to ten times return on their money in only a few years.
Don’t Give Up
If one funding source does not work out, try a different one. Success usually does not happen in a straight line. It may take some persistence to get the funding you need.
James River Capital is an award-winning investment firm. They help build their client’s portfolios by investing in solid businesses. Through their expertise, they help people build wealth and businesses to succeed.