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    6 Replies Latest reply on Jan 10, 2009 2:11 PM by Adducent

    How to get funding

    riversraven Newbie
      I have looked up and research investors angel investors and so. I do not have collateral for the kind of capital i need for my business what should i do?
        • Re: How to get funding
          LUCKIEST Guide
          How to get funding, Welcome Raven

          I would do two things to start. One, Develop a Business and Marketing Plan

          and two, Contact SCORE. SCORE is FREE.

          Good luck
            • Re: How to get funding
              gegrus Adventurer
              Dear Luckiest
              it is seems that you are GURU
              on this forum
              Please may i ask you
              where to find investor please?
              do you have any idea?
              please respond!!!!
                • Re: How to get funding
                  Tracker

                  Perhaps you will find the following helpful in answering the questions posted in this thread.

                  There are few things more exciting than launching or expanding a business. The thrill of building your own business, becoming financial independent and not working for someone else are powerful motivators. I know; I have been an entrepreneur for 26 years. Over those years, I have started, funded, bought and built up several businesses of my own and helped many clients do the same. I will tell you something that most people do not think of much as being a cornerstone of business success. Persistence

                   


                  That's right. Often it is not the business you are in that makes you a success ... it is what is in you that makes you a success. So, if you believe in your self and your business ... keep working and persevering. Even as times get difficult, as they will at some point (all business owners go through them) ... keep trying and always move towards your goal of finding investors or funding sources for your business or planned venture.

                   


                  Where Do You Start? What should you do first?

                   


                  The logical start is to do basic things first. Things like establish what you are going to tell them about your business, and what you want to tell them about yourself, your plans for use of the money you receive and what your goals and objectives are for the business. It is also helpful to know what investors and funding sources look for in businesses and how to find investor prospects and funding sources ... we will go into these and more in the following pages to help you get a good start.

                   


                  The 5 Most Important Things That Investors Want To Know (to much to paste here, contact me - see my profile for contact info - and I'll send you this article).

                   


                  What Do I Tell Them About My Business?

                   


                  We recommend that you start out simple to gage their level of interest. Do not send anyone your complete business plan unless and until they ask you for it.

                   

                  One thing that you may want to do is to create a blind profile document on your business. A blind profile is usually what you want available to post on some of the online venues where you can advertise that you are seeking funding so that investors see it and can reply to you. You also want to have it on hand to send to prospective investors or funding resources to see if they would have interest in seeing your complete business plan. That way you do not disclose too much information. You want to give them just enough to get their interest so that they ask to see your business plan.

                   


                  Contact me if you would like an example of a type of company profile suitable to send to investor prospects and funding sources.

                   


                  What's Next?

                   


                  Before you start your search for investors and funding sources for your business, it is important to understand the types of businesses that investors are going to be interested in to make sure that you match your business up to the right investor prospects and funding sources.

                   


                  While venture capital firms and angel investors tend to invest in earlier stage growth companies, private equity investors tend to focus on more established and mature businesses, often contributing both equity and debt (or some hybrid) to the transaction.

                   


                  No matter if it is a venture capital, angel or private equity investor here are the key things that investors look for in an investment candidate:

                  • Focus
                  • Strong management team
                  • Ability to generate cash
                  • Significant growth potential
                  • Ability to create value
                  • A clearly defined exit strategy

                  While private equity firms employ various strategies to create value in their investments (such as the consolidation of a fragmented industry), a common strategy is to acquire or invest in a "platform" company and grow the platform through further "add-on" acquisitions. Add-on acquisitions are typically smaller but complementary to the platform investment. Ideally, the synergies of the combined entity create a more efficient whole, both operationally and financially.

                   


                  In 2009 many private equity firms that typically use leverage (debt) to increase the return on the firm's invested capital, will in many cases use less leverage and more of their own capital for deals. The amount of leverage employed is normally determined by the target's ability to service the debt with cash generated through operations. The ability to generate cash allows the private equity investor to contribute more debt to the transaction. Because of the use of leverage, often, the cash flow a business generates in the early years following the acquisition is going to be very critical - so for your venture to be of interest to private equity it has to have solid, dependable margins.

                   


                  If the strategy is to grow the business, and it usually is, growth also consumes cash. For this reason, investors focus on the cash flow of the business. Because cash flow is the basis for valuation, the ability to improve operations to generate increased cash flow will also yield a greater return on investment for the investor upon exit.

                   


                  Investors make money from both the cash flow of the acquired business and from the proceeds generated upon exiting the business. The exit provides the investor a mechanism to monetize the firm's equity. This is also called a "liquidity event". The exit provides the Investors with a finalization of the investment and an opportunity to distribute profits. Often profits upon exit go to back into the cash account to fund new investments.

                   


                  Remember:

                  Understanding what the investor is really looking for is essential for you to be efficient in your search so that you contact those that are going to have the most interest in your business.

                   


                  Now that you have an understanding about being prepared, the search begins!

                   


                  Contact me directly if you would like details on an information guide that will help you with the Search for Investors & Money for Your Business. The guide also provides a list of 100+ angel investor sources and how to find many more types of sources of capital for businesses. It also covers how to conduct the search, what to say to them, how to follow up with them etc. It also has a section on legal ways to raise money by offering and selling stock in your business.

                   


                  I hope the above helps you in some way. Good luck and best wishes on your funding search.

                   

                  Dennis Lowery
                  Adducent, Inc.
                    • Re: How to get funding
                      gegrus Adventurer
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                      Dear Dennis Lowery
                      Thank you very much
                      I am really flattered and will certainly follow your advices, i am really new to investing, and this investment class was brilliant

                      Please send me <!--if gte mso 9><xml>
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                      an example of a type of
                      company profile suitable to send to investor prospects and funding sources.
                      May i also have <!--if gte mso 9><xml>
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                      <!endif-->details on an
                      information guide
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                      <!endif-->you with the Search for
                      Investors & Money.

                      Looking forward
                      Thank you very much dear Dennis Lowery
                • Re: How to get funding
                  gegrus Adventurer
                  Hello everyone
                  My name is dmitry
                  i wonder who are they angel investor
                  are they real?
                  please tell me more