Venture Capital

What does the term Venture Capital mean, and is it the right thing for your up and coming business? This is from the article in Entrepreneur.

What Is Venture Capital?

What It Is: Institutional venture capital comes from professionally managed funds that have $25 million to $1 billion to invest in emerging growth companies.

Appropriate for: High-growth companies that are capable of reaching at least $25 million in sales in five years.

Best Use: Varied. From financing product development to expansion of a proven and profitable product or service.

Cost and Funds Typically Available: Expensive. Institutional venture capitalists demand significant equity in a business. The earlier the investment stage, the more equity is required to convince an institutional venture capitalist to invest. The range of funds typically available is $500,000 to $10 million.

Ease of Acquisition: Difficult. Institutional venture capitalists are choosy. Compounding the degree of difficulty is the fact that institutional venture capital is an appropriate source of funding for a limited number of companies.

Amy Rees Anderson of Medi Connect Global advises, “Think twice before you consider venture capital. Consider bootstrapping, angel funds or private individuals first, because venture capitalists will take 30 percent to 35 percent of your company. 'Once you raise capital, whether or not you still own a majority of the company, you work for them.' And don't ignore liquidation preferences. A venture capitalist who stipulates two times liquidation preference would be entitled to receive two times his or her investment before remaining funds are disbursed.”

Sounds like sound advise! So this begs to question, what is an Angel fund, or how does one find a private individual interested in granting business venture funds? Of course there are the grant programs, but as mentioned in a previous post, it is with precision the requests are submitted, and there are no guarantees whether or not you will get the grant you’ve requested.

If you are interested in reading this article in Entrepreneur regarding Ventures capital, go to the link at the top of this post. I’ll continue this further as I gain more about angel funding.

m_99

Angel Funds

So, I went back to the magazine, and viola’ there’s Angel finding information. Whoever said there’s not reliable information on the Internet? Click the link above to read about Angel Fund Networks.

Question is...am I brave enough to ask for money? Cheesy question? Are you brave enough?

Here's a link to register for Angel Funding:

Taking the mystery out of obtaining a grant...

From the research I have done, I am beginning to understand why, when organizations place a request for a grant, it is a collaborative effort. That is, many of the staff get involved in the steps of finding, qualifying, collecting, verifying, and writing the draft, as well as checking, and changing as needed, before anything is turned into for final approval and before it is finally drafted and signed off on, then submitted by the deadline imposed by the grants committee. No easy task...

There are many steps, the first being - identifying the appropriate grant for your stated purpose. I read an article yesterday on a public broadcast site regarding a grant they are going to be giving.The stipulations were immense, and it became clear that matching the purpose with the requirements is a job in itself.

The first step in locating a grant is you must define your purpose.This is done by clarifying the purpose of your project by writing a concise mission statement. Once accomplished, seek funding that is a match for your project, including who will benefit, and how the grant money will be applied to meet the stated purpose. That's just in the preliminary phase, and the work hasn't even begun in processing the application.

So, I am wondering, as I am only one person, do I have the ability to identify, locate, define, collect, and process such a request, alone? I don't know.

I have been given a couple tools called the Federal Money Retriever and another called the Grant Gate. These are two databases which contain a huge number of institutions, both private,non-profits,and governmental sources which are in the business of giving grants to causes. Some contain grants only to organizations, some will give monies to individuals. What is important, as I see it, is the tools are instrumental in the search. They've taken a lot of information and made it possible for someone to locate the right grants, and research these as well.

There's a lot of hubbub on the internet about "getting a grant", such as, the Lesco fiasco. Basically, Matthew Lesco is a consultant who has put together a lot of information to sell to people who do not know anything about grants. People think when buying his products that they will be able to get a grant, simply by buying his products. This is incorrect. People are so desperate for funding, and hear all the fantastic stories, that they will take the risk by spending money (often money they can't really spare) to become in the know. The problem with this is, once you get the book, you quickly see, it is a bunch of information that doesn't tell you much more than you knew already. And half the phone numbers are outdated or bogus. Years ago I purchased Matthew Lesco's book on grants. I found it to be silly and not very helpful in understanding what one has to do to find a grant, let alone write an application for a grant. Most of what he wrote in there was horse sense, and I think that's what he used to fool people (me included) into purchasing his materials. The truth is, finding a grant is very hard work, and the process in getting a grant is harder still.

That's the beauty in the tools I mentioned. There's no other products anywhere, that takes the stress out of the search as these do. The databases are loaded with GOOD information and direction, and if one is very vigilant, finding the correct grant is made a lot easier. Then your work really begins! So I say, don't be fooled into buying useless junk when you can obtain (for free!) the Federal Money Retriever and the Grant Gate at Aidpage.

Now all I have top do is get my courage up to achieve what I have been dreaming of doing.

To learn about the Federal Money Retriever, and the Grant Gate go to:

http://www.idilogic.com

or, read the following Aidpage regarding Idilogic and it's tools:

http://us-federal-government-aid.idilogic.aidpage.com

Happy Hunting,

m_99