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Raising Venture Capital? Looking for Angel Investors? Small Business Owners have so many questions while trying to raise capital from Angel Investors and Venture Capitalists as well as other types of financing.
I see thousands of small businesses across the country every day. InvestorQuestions is here to help steer you in the right direction and increase your small buiness IQ.
Feel free to ask anything about small businesses raising capital such as: What you should expect in a term sheet?
What should be in your business plan & executive summary? What kinds of customer and revenue
requirements investors require? What kinds of technology would work for me? Which kind of capital to raise, and, of course, should you be raising Venture or Angel Capital or using
some other sort of financing options like factoring?
Got a question about growing your business while raising capital? Just ask:
The answers I give are my opinions only. You should consult a lawyer before doing anything.
Also, this site is free and run by me. It is not owned or operated by Second Venture Corp or FundingPost.com.
Answered & Unanswered Questions:
ARC Angel Fund, A NYC-Based Seed Fund, Announces Its First Close, now reviewing investment opportunities.
Our Next Philadelphia VC and Angel Investor Conference will be on Thursday, July 29, 2010!
I love getting pitches that start with: You probably hear this all the time, but I REALLY have the best business ever! Here is one where the math really works! Just brilliant.
FundingPosts Perfect Venture Conference V will be in NYC on Nov 12, 2009. We will have 20 early-stage Tech companies and over 40 VCs and Angel Investors!
Our next Sedona, AZ Venture Capital and Angel Investor event will be on Thursday, December 4, 2009.
Our next Dallas, TX Venture Capital and Angel Investor event will be on Thursday, June 4, 2009.
Our next early-stage VC and Angel event in NYC is on May 13, 2009 from 2-6pm!
Our next California Venture Capital and Angel Investor event will be on Thursday, March 5, 2009.
Meet 26+ VC Funds and Angel Groups at the FundingPost VC Showcase. Its a Reverse Venture Fair Cocktail Party on Wednesday, Feb 11, 2009 from 6-9pm.
Participating Funds: Stonehenge Growth Capital, Tri-State Private Investors, Global Media Fund, Genacast Ventures, Chart Venture Partners, Innovation Ventures, ETF Venture Funds, Originate Ventures, Edison Venture Fund, Rudyard Partners, Connecticut Innovations, DFJ Gotham Ventures, The Verticom Group, NYC Investment Fund, WFD Ventures, Milestone Venture Partners, Intel Capital, New York Angels, Golden Seeds, OmniCapital Group, Argentum Group, iNovia Capital, First Round Capital, Jumpstart NJ Angel Network & Greenhill SAVP and Connecticut Angel Guild
Whats the most important thing that an Investor is looking for today?
The big question I am hearing every day is How is this Wall Street Fiasco affecting Early-Stage VC and Angel Investing? Has the money dried up? Will Venture Funds and Angel Investors still consider my deal? How has this changed their strategy?
We recently interviewed 4 early-stage VCs and Angel Investors, who will be speaking at our November 3 and 4 conference in NYC.
This may sound as absurd to you as it does to me. While searching for angel investors, a company contacted me (several in fact, but one was a real company with real people) and offered to fund my start up to full production due to the type of mfg as long as it's all USA made. (My plan anyhow). Funds are incredible and the employees and business check out with my lawyer. They want the min fee of 100K up front that is refundable in 6 months with funding draw #1. These people check out and as I have been raising the 100K plus attny fees and living expenses for 6 mos. a few people questioned this. They too are running due dilligence and I hate to even think this is a scam. It checks out and the state they are from says they are legit.. my lawyer says they are legit... Research shows connections of these people to all the right groups, but I know scams can run deep. Gut instict said to listen to them, second instinct is in awe.. and finally I am double checking myself. A wealthy potential provider of these initial funds is also doing due dillidence. This is a big deal and a life altering invention that will change the USA and mankind. How often does this kind of thing take place on the up and up?
In response to the FundingPost email for the event on June 5, 2008: The event will focus on best practices in raising capital.... how they determine your valuation.
This one caught my attention... you never let a VC tell you how to determine your valuation. Lol. It's like letting you home buyer tell you how much you should sell the house for!!
I notice the tone of this e-mail focuses on Entrepreneur sucking up to VC. I am an entrepreneur and the way I see it is, it's a privilege for VCs to invest in my company that i bust my chops to make it happen (and not the other way around).
VC and company's are partners in a single mission. Funding post should position it such a way. It's very immature to have entrepreneur who are the having to suck up to VCs. It doesn't have to be that way. It should be a place of gathering for two people with common goal to meet.
What is Angel Capital? How can I get a list of Angel Capital groups?
I have a friend who is writing an article and needs an Entrepreneur who is under 40 yrs old, and whose companies date back to 1999 or so, who now has $5M in revenue or more, who did some creative things to slog through the downturn until things improved. Any industry, don't care about where they're at with fundraising.
Also looking for anyone who is still in business, any age, who's got a '91 recession survival story and grew into a big success, and they're still with the business
Not Really a Question, just a note from me that we InvestorQuestions made the Alltop.com list of valuable resources of Venture Capital RSS Feeds and websites. Its big news making the news!! So this entry is my way of standing behind the reporter and yelling "him mom!"
What are some good strategic ways i can come up with exit strategies for my angel investors. The industry is advertising and the business is car wraps. The future of advertising. (Mobile Billboards.)
I have been in the Bar/Nightclub/Restaurant business now for about 12 years. I am trying find out about how to find investors to start my own Nightclub/bar. What kind of advice can you give me. I have tried looking into companies like AdvanceME and Rapid Advance. This is something that I love to do but I am tired of working for other people. My availablitt to come up with cas to start this is very slim. Please email me with some advice. Thanks.
What do you think of shell corporations as a fast way to raise start up capital?
I am looking for an investment partner of $100,000.00 to produce a screenplay for global distribution. Santa is the messenger and the theme is Peace and non Violence. I have been a television producer and fine art photographer since 1985 and have worked in television for 3 years doing a live television show for children. I am 59 and have been going to the University of St. Francis. Currently residing in Garrett, Indiana where I now have some work in their new Garrett Museum of Art. Do you know any investors that believe in Peace and Non Violence?
Will angel investors look into the personal credit history of the person trying to get the funding for their venture?
I have a california based software company and Im looking to raise my first round of Venture Capital - It seems like I am going to get a low valuation. How can I get investors to give me a better valuation so I give away less of the company?
I am interested in knowing how to place a value or dollar amount for shares as it relates to a startup? For instance if a company needs $500k how do they utilize their shares to raise it?
I would like to raise capital to buy houses to rehab. Who do you recommend?
I have established a high technology startup company in South Africa. Our first project is assembling, marketing and selling branded desktop PCs and notebooks. Our business require start-up amount of $ 3 million to design , develop and pilot out product. Is there an angel investor out there willing to invest in our project?
I'm in California and I'm looking for Angel Investors for my business. I know that there are a lot of rich software execs out here, but I don't know much about angel investing, how it works, how to meet them and what to say. any advice?
I need help in finding most everything to start from the ground up I have already got the person who can manage the company. But I need lots of help finding the Capital the start can you please point me in the right direction.... Thank you for your help and time....
i have been in restaurants for a long time and i have a passion for cooking and a very good concept for a new restaurant at lest i think so. the problem is money. my question is how do i go about finding an investor.
I own a 3 story brick building, 30,000 sq. feet in Pittsfield, MA. The town is going through an incredible renaissance. When I bought the bldg. in 2003, it was 2/3 rented. Then, I lost some tenants and others downsized. The bldg. is now 2/3 empty. However, in 2004, we did a huge renovation, installing an elevator, gutting and renovating the lobby -- many changes. It's a great building. I must reposition the bldg. I am developing a whole vision to turn it into a boutique hotel and have been doing extensive research. The area can support the hotel. However, I have beaucoup bucks invested already, and need around 3 million in capital to do the construction, pay the staff, management team, etc. for two years, until the hotel is up and running. Do I need angels or vc folks? How do I get back my investment? Paid 550,000 for the bldg. in 2003, put in 200,000 in cash (there was excellent cash flow when I bought it -- otherwise, I wouldn't have bought it!) and another 150,000 to carry it over these years. Plus construction loans etc. So, I guess I have around one million into it. Thanks in advance for some answers.
My partner and I have a successful restaurant in Los Angeles and are looking to open another location. How should we go about finding new investors as this one will take significantly more start up money than the original?
Is there a cheaper way to start a sporting goods store?
I have created one of most unique concepts in a seafood restaurant in the south florida marketplace. I am one of the hardest working,most personable Chef/Owners built from the OLD SCHOOL style of running a fine oiled establishment with SUPER STAR /PIZAZZZZZZZ. MY PROBLEM!!!!!!!!!!!!!!! I cant seem to be able to put the financials in the the right place always seem to run out of working capital, or crunching for payroll, Nor keeping up with the payables, But Please dont get the wrong idea the restaurant has an incredible reputation , with 4 star reviews High Zagot marks and a highly loyal customer base !!!!!!!!!!!!!! LOOKING FOR STRONG BUISNESS AND FINANCIAL HELP TO KEEP THIS GREAT CONCEPT FROM SINKING THIS BUSINESS IS AND CAN BE A OPPORTUNITY FOR THE RIGHT PERSON OR GROUP PLEASE HELP
Which kind of capital to raise, and, of course, should you be raising Venture or Angel Capital or using some other sort of financing options like factoring?
Hi, I reside in St. Lucia (Caribbean) and would like to start a film production Company. I have already procured three screenplays. I am looking for a Angel - USD150,000.00 - to invest in the company. This should actually get the first film finished. I have been unable to attract a sponsor. Can you direct me to any Angel or VC Firms who invest Internationally?
I am trying to find ways to buy the laundromat that I work for. The owner wants to sell and I want to buy! Getting a loan from a regular bank is not going to work, my credit isn't great and I am only 23. Please, any information will be helpful! Thanks
I, my wife, my daughter and her husband are planning on opening a funeral home. We are going to have to get some equity financing for start up money in the amount of $350,000. What percent of the business is proper for the investor. He will be a silent partner. Thanks
I am looking for an angel investor to invest in me as an individual, to do a masters in motorsport engineering in the US as i am in the UK. I have a place to study in North Carolina and want to later be involved after my study in promoting my research etc. What is the best way to show the investor i am a viable option and is there a website for angel investors who would be more suitable for my request? Thanks. Jacqueline.
How would you go about raising capital for a technology project? Does the size of the project matter? How so? Does raising capital for a tech project differ from raising capital for other types of projects?
I have a great vision for a new company that will cover white space for a specific service to tourists. When is the right time to approach an investor for support? I am putting together a business plan and presentation, but I dont think I will have the capital for a market analysis, etc that will reinforce my business plan.
Would angels or venture capitalists be interested in investing in an e-commerce & luxury goods business that has just launched?
My business partner and I are interested in opening a scrapbooking store in our area. There is no direct competition in our area. We've attended a class to put our business plan together. The market research is very favorable. We are currently an LLC that is conducting business on a small level (not on the Internet) in our local community hosting scrapbook cropping events and sell a very limited amount of retail products at these events, but really want to move into a storefront. We both have backgrounds in business and scrapbooking just happens to be a hobby. We recognized the income potential. Neither one of us has accessible cash on hand to invest in the business, but we are very confident that we have all the skills and the know-how to make this a successful venture plan! A storefront costs a lot of $$$$. Is our best option an angel investor?
In your own opinion which is the best way to fund an investment trust set up with the aim of having private equity in emerging markets?
I have developed a new money transfer service system business. I am trying to raise capital to deploy. Where can I find an interested investor?
How Angel investors differed from VC’s? I have incorporated in 2003 but lack of finances. I have ideas that want to develop it in to a product. My ideas will have a great future. How can I convince a VC and get capital? Do I need to make first my executive summary for two pages? Can I get help to make good executive summary? What should I do to crate an interest to VC’s? What VC’s expect from new business? How to become quality deal to present? What kind of return are venture capitalist looking for and terms? Does Venture Capitalists invest in profitable business in overseas? Thanks.
What I love, is when an entrepreneur has a term sheet, or is up and running and profitable and then the investors come begging!! But when an entrepreneur really needs the cash to survive and grow the business they are no where to be found!
My husband and I opened a restaurant 4 months ago with all our cc and home equity, it's doing well but are about 40% short on what we need to be making in order to pay all our monthly payments, we desperately need investors or we will have to close our doors soon (we have only been open for 4 months), where do we look? How do we go about it? Any help would be appreciated.
I'm opening a wellness center in MA. We have completed a business plan and found a great location and now I need to find investors asap to secure the space. I'm sure you hear this all the time. How do I blindly approach investors I've never met? I see that you suggest going to events, but what If I don't have time or money to play the field that way? -KF
I have started an LLC, and was wondering are there any restrictions on the amount of money i can raise in a single year through a private offering, similar to the that of a corporation? Thanks.
Looking to open a new country bar in Ontario Canada. NO CLUE WHERE TO START. we know the business side, market research etc, But how do we gain capital?
I have started a consumer action website from my own funding and now approaching investors to fund the venture for taking it to the next level; basically the funds will be used for publicity and brand building. There are also new services planned which will augment the current offering. I have a solid tech guy with me and I have experience in systems, project management, e-biz strategies and marketing. I have never worked or negotiated with angel investors and so I don't know how the negotiation can be made so that I don't feel unhappy later about the whole transaction. I have developed the site thru a very lean team and same team is now maintaining the site and working on new services. I don't make any revenue now; neither I draw any salary from the company. So what can be a proposed holding pattern between me and an interested investor and what could be a win-win exit strategy?
I need help raising capital for my entertainment company. How can I do this? What do I need?
I need to raise $350,000 to remodel, expand , and buy equipment for my existing Restaurant and Bar, I currently own the building and land, No mortgage on it, I am looking for investors who want to be a part of a established business in a tourist town with over 3 million visitors a year, where do I find such investors?
I am seeking a 150k line of credit for my photography business. I spoke to a company in Beverly Hills, CA that is called **************, www.*********.com. He requested a retainer fee of 2000.00 upfront and then finally 8.95 % fee for consulting and loan. Is this fair? Does this sound normal. He also said they will register my business with Dun and Bradstreet before we try to get the loan? I need real advice!!!!!!!! Thank you for your time.
Who can tell me what I should expect for is the range for legit money middleman. Do these guys ever want a piece of the company if successful? is a combination of fee and equity unusual?
I have created an association for Latin musicians, DJs and other artists. I promote them on TV, Radio and other media. I produced a television program airing in a big Spanish network but I am running out of family founding before I even start making a profit. I need about 50k to make it go. What would be the best way to obtain this money? Should I borrow from the bank or is there any government agencies that may be able to help? Should I look into Angel investors?
Whats the best way to follow up with investors?
We are a 50-person company that was begun almost 11 years ago. We are seeking to consoldiate our nearly $600K of debt into a single, unsecured loan or Angel funding that would also partially fund the purchase of another company...to the tune of a total of $1M with a 5 - 10 year payback. What are our options?
I am seeking to start an acquisition group that would purchase small industrial manufacturing companies and form them into a minority-owned company. What would be the best structure to attract capital?
We are three very smart and hard working scientists in biotech. We have very good idea to develop therapeutics for a disease. Unfortunately, we do not know too much about business. Could you please give us guidance on where we can start seeking financial support? Regards Kerry
I am interested in opening a pet-related franchise here in my area. The parent company is well established with other sites in multiple states. This location would be women owned/ran. We do not have the personal cash/savings/equity to offer for startup and franchise fees. How would we go about finding investors, funds, or loans?
I own an existing company in which i would like to find investors for. I would like to find an investor(s) who would co-sign a loan, i do not want capital. The investor would receive a weekly commission from the profits of approx. $200-$500. Over the course of the 5 year loan (my company makes loan payments and covers all costs) this co-signing or investment will return 75k-125k. Does this sound like a good investment opportunity?
I have designed a new type of car, and am in the scaled prototype proccess. I am doing this project with limited funds. Are there sympethetic investors that will bankrole a HIGH RISK, out-there idea?
I have a Japanese restaurant business idea that I worked on about 1 year. Is there way the plan get funding based on my keeping 51% on the idea over investors?
how can i get some funde to pursue with my project? it will be an online business something similar to www.MySpace.com and www.MyBestTalent.com
What is promotional capital? How can someone raise it?
I am looking for an Angel for a specialty store. I will carry sporty clothing cosmetics and beauty products. I currently sell items from home and I am looking to have a online store and a physical store. My question is: How do Investors pick companies to invest in?
What are the risks financiers face when investing in SMEs?
I'm in a quandry. I presently have an extremely small flea market on a not so major hwy. I have recently discovered that there is going to be a casino built within 5 miles of my location. There are several people that are in the KNOW that are currently snatching up much of the property in my surrounding area. I have 1st buy rights to some of this property which also has comercial buildings on site. who should I talk to for developing?
I'm looking for valuation benchmarks for early stage web apps developers. I have a prototype, am close to my first few revenue contracts from high profile customers. I'd like more capital to scale both development (more apps into the pipeline) and distribution (multiple markets are better than one). Quick thoughts? Other good places to look?
Does a angel investor have to be made into a partner? And if they are not partners how would they use the investment for tax purposes?
I am looking for any information on setting up a sole propriership. Anything would be useful.
What does it mean to finance different stages: Angel, Seed, 1st round, 2nd round, later stage?
I am opening a sporting goods store and need $40K to proceed. I am meeting with a venture capitalist in appx two weeks to present my business plan. I have an existing business that is profitable but I have never dealt with a venture capitalist before. Can you give me a general idea of how venture capitalists expect to be repaid, what kind of interest and term they expect, and what kind collateral considering the amount of funds I am seeking?
I would like to find a few investors for my Bar/restaurant, but I don't want to offer a percentage of interest in the business. How should I proceed and How do I pay off these investors?
I have a small pet shop that is presently a sole proprietorship. Would I have to incorporate to raise venture capital?
I am starting a company with a partner and we need to raise capital for a prototype, as well as later capital for production and marketing. We are at the final draft phase of our patent for a brand new product that is necessary for the new technology world. I have attended Angels Investor meetings and have noticed that most people will not invest in companies that have had no sales and have not made profits, however we still need money to create a first prototype.
I would like to raise capital to activate account in London, I have about $59 million to work with once accounts activated. Once I deposit the fee the account will be active and I will be able to use the $59M to grown my business. How can I raise the $100K needed to activate the account?
I need about $1,000,000 to build a factory in Japan. Do I need to give away shares of my firm to get a business loan from angel investor? Can I just give away a percentage of the future profit?
What risks do I run choosing venture capital to start up my business?
I'm raising money for my company - we are telling investors that we are raising anywhere from $100,000 - $10,000,000 to give them a choice. We can do a lot with $100k and a lot more with $10M. Its a great business - we will make a lot of money, but I'm not getting the investors interested.
I have a great company- it's going to be huge once I get some capital. Whenever I pitch to investors, they are never interested? What am I doing wrong?
I met an investor at one of your events 2 months ago - he seemed really interested in my company and told me he would follow up but I never heard from him. Any advice on what I did wrong?
What kind of returns are Venture Capitalists looking for?
I have a properly structured PPM. How do I locate investors or find broker dealers to market my offering?
I have a lawn and garden product with trademarks and many patents pending which I filled out last August. I have completed all the testing and I'm ready to manufacture. Before I start selling on TV, which is my background, and a few years later go to retail--should I look for Angel Investors after creating a LLC or before? Also what percent is the average ownership with this type of investor, and is it forever?
I need to get about $500,000 for my business to manufacture my product - I dont have that much money. How would I go about raising it?
Will I be able to find funding even if my business plan shows zero all thru its financial statement since I don't have any existing revenue? How do I write with such statement?
How is valuation determined for a startup?
What is Factoring?
I have an idea that I want to develop it into a product. At this stage, I am not sure if I can receive financial support from VC or not. My idea will have a great future, but how can a convince a VC and get capital? Thank you in advance.
What you should expect in a term sheet? What should be in your business plan & executive summary? What kinds of customer and revenue requirements investors require? What kinds of technology would work for me? Which kind of capital to raise, and, of course, should you be raising Venture or Angel Capital or using some other sort of financing options like factoring?
I am beginning a software company in the San Francisco Bay area. Are there any special groups or investors that specialize in software industries?
With the high potential that my newly developed seed company has to grow into a multi-billion dollar corporation, starting from the ground up already possessing an outlook worth $20M how can we attract and obtain a substantial capital enough to ensure the support of our company's growth and exposure? We are not looking for ventures more like investors willing to take on a directorial position. How can we show investors that we are sitting on a gold mine idea that will create substantial returns within 6 months of operation? We are willing to work with partners as we have room for two board members willing to invest. We have pitched and have marketed our business plan, but to no avail. It seems as if private investors are becoming more likely than searching for partners or ventures. Please explain how we can attract investors to at least hear what we are pursuing and how it would be in an investors best interest to invest in our company because of our high probability rate of success. We have no competition and no one has ever attempted what we are offering.
How do you go about raising capital?
How does a small minority business access and utilize venture capital?
I have a pressure washing company for 16+ years (I go to trucking companies and washed there fleets of trucks). I want to build an automated truck wash (it's a proven method of washing trucks) and have my business plan and site ready to go but lack the start up capital of $1.8 Million. I am looking for an investor to help me get off the ground. My traffic study show that I should have them paid back in 3 years or less. What should I expect from an investor? I am 36 years young and need some advice on this issue...
Does an Angle Investor look for existing businesses only, or do they look for start-up businesses that have not been created?
What is the normal fee to use a broker to obtain VC funding?
What you should expect in a term sheet? What should you watch out for and be sure to include in a contract?
What does a typical VC arrangement look like? I know that is a vague question, but for example, if a VC company invests say $1,000,000 in a tech company, how does the VC company get a return? Is it a percentage, payments, or a combination of both? Is there an industry standard percentage or does it vary wildly? I am trying to understand if this is the best way for a company like mine to go. Thank you for your advice.
How long should my executive summary be?
How do I actually meet investors?
I don't run a large corporation - its a small business, but Im looking to grow. Are the Investors going to expect me to act like a fortune 500 executive?
I need to raise $600,000 in seed capital to build my web based prototype, but even though its technology, Im finding it hard to find an investor. Any advice on this?
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