There are many sources you can access to raise cash for your business. This section discusses the pros and cons of each source. In addition, this section gives you links to existing web sites listing angel, venture capital and other lending institutions.
Angel Investors
Angel investors are a special breed of investors. Whereas venture capital firms and funds invest pther people's money in new business, angel investors invest their own money. Willing to take great risks, they are the start-up entrepreneur's best friends. Angels most often assist a company when it may be little more than an entrepreneur's dream. Frequently, they offer more than money; serving as coach, mentor, and champion, and often providing guidance from the point of view of one who has experience turning ideas into fortunes.

Sites that have listings of Angel Investors:

vFinance
Garage

Venture Capitalist
Venture Capitals are a good choice for companies who are willing to exchange equity in the company in return for money to grow or expand the business. Venture capital firms often want a high rate of return(20%+) and will finance the business with $500,000 to millions. A venture capitalist differs from an angel investor in terms of wanting greater control of company and quicker return an investment.

Sites that have listings of Venture Capitals Firms:

vFinance
Garage
Finding Money
VCAonline

Strategic Investors

Strategic Investors differ from angel and venture capital investors in that they are less interested in a financial return and more interested in the technology you are developing or the markets you are serving.
Venture Debt
Venture debt is essentially a loon with potential equity upside. Here's how it works: Banks and funds extend loans to start-ups, usually for working capital adn equipment. In addition to charging 9 to 12 percent on the loan, the lender gets warrants. Warrants permit the lender to get an equity stake in the company at a later date. So if the company goes go public or is acquired, the lender could then exercise the warrants to buy shares at a previously negotiated price and cash them in as part of the sale or IPO.

In most cases, venture debt finds do not insist on collateral or require restrictive convenants.

While there are many firms focusing on traditional venture capital, there are only a few firms that dedicate funds to venture debt. Here are a few work noting.

Sillicon Valley Bank
Lighthouse Capital Partners
Western Technology Investment
Pinnacle Ventures

SBA
The U.S Small Business Administration (SBA) was created to help entrepreneurs fund their new businesses. The SBA provides a variety of different loans for specific situations. To learn more about what the SBA can do for you, click on the link below .

Small Business Association

MAKING YOUR PITCH

Whether you're seeking funds from Angels Investors, Venture Capital firms, Strategic Investors, Banks, or the SBA, you are going to need to create a pitch which gives potential investors an understanding of your business.

Timing: Target your meeting length for 60 to 90 minutes, with 30 to 40 minutes used for your presentation and the remainder of the time used for questions. Make sure your presentation is well organized and is clear, concise, and to the point. Remember, this is the first (and maybe the only) chance for the audience to evaluate you and your business. The more porfessional you are, the better your ideas will be received.

Subject: First, discuss the market you intend to serve and the product(s) you intend to introduce into that marketplace. Describe what is driving the growth in your market and the value proposition of your product (i.e. why customers would choose your product over the competition). Discuss how far along you are in the development of your product and list the customer you have signed up so far or those customers that are sampling your product (Back in 1998 and 1999, you could actually get financing by pitching a technology with or without having customer interest. Now, funding is alot tighter and investors will be looking for customer interest as a way of validating the importance of your product into the marketplace.

Second, give the audience an overview of your management team, and the experience they bring to your company. Needless to say, the more the experience, the better your likelyhood for success in executing to your business plan.

Third, present your finance plan, giving your audience and idea of how much money you will need to launch your product(s), and how long it will take for your business to be self-sustaining. Many observers say investors pay little attention to a company's financial numbers during a "pitch"; they prefer to run their own numbers. Still, you need to have this section of your presentation well organized and easy to understand. Prepare for alot of questions on the assumptions you used to build your plan.

Feedback: After the Q&A portion of your presentation, ask your audience for feedback on your presentation. Constantly look for ways to improve your pitch.

Follow-Up: After your meeting, be prepared to deveote alot of energy to following-up. Investors have very busy schedules and are sometimes slow to get back to you. Show determination, keep calling until they give you an answer: Yes, let's have a second meeting, or No, we'll pass.