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January 26, 2006
Very good article on Venture Debt
Connect :: Resource/Article :: Poison in the Well This article by Josh Coates of Berkeley Data Systems is very informative about seed funding and venture debt. While he restricts his criticism to Utah angel investors I am confident that similar investors and tactics exist nearly everywhere.
Posted by bizfund at 01:05 PM | Comments (1) | TrackBack
January 22, 2006
Success!
My current business is consulting with entrepreneurs who are seeking capital. I have been working on this for about 3 months with the current focus where I work mostly on finding debt sources. On Friday I had a conference call with a lender and one of my clients where the beginnings of an agreement was reached. This particular client was a subcontractor with very little collateral but a healthy services business. He was seeking capital in order to bid on a job that would double his revenues. After much searching, it appears I have succeeded. If he moves forward this will provide him with a virtually limitless capital source that is not contingent on his credit or assets.
Posted by bizfund at 11:16 AM | Comments (0)
January 16, 2006
What Investors Expect and Want to See
I actually intend to write a book on this very subject. It will cover what makes a business fundable from the perspectives of diverse capital sources. I am thinking of it as "What Those with Money WISH You Knew About Raising Capital". There are lots of good resources online that cover the basics that investors want to see in order to invest. I will compile some of them and see if we can come up with a basic set of docs and characteristics that are necessary to raise capital.
Posted by bizfund at 03:50 PM | Comments (0)
Two Other Plan Listing Services
Funding Post and Funding Universe These two services both claim that they are "matching angel investors and entrepreneurs" like 504bank. Fundingpost charges a 100 dollar fee for the first 3 months and 30/month after that. They make the bigest claim about capital available at 81B dollars! Funding Universe is free to post and claims 514M in capital from 738 investors.
Funding Post seems to concentrate more on the east coast, most of their lunches and such seem to be in the Virginia area. Funding Universe was started less than a year ago in Utah as FundingUtah.com by Paul Allen of myfamily.com and Infobases.
All three of these services are seeking to meet the needs that are inherent in a fragmented system. There are something like 50,000 active angel investors in the U.S. and probably more than a million entrepreneurs that would like to find equity funding at any one time, but maybe only 100K of them that are actively searching, it's really impossible to know the exact numbers. It's clear though that a lot of capital exists that seeks to be invested in high growth companies but with very little organization. Next we'll look at what the investors want.
Posted by bizfund at 11:33 AM | Comments (0)
Interesting Investor Search Service
504 Bank
This company has a very interesting business model for enabling transactions between those seeking private investment and the private investors. They have a pay-per-click model similar to Overture or Google.
The company pays a small fee to post their plan, a "security deposit", and then they pay based on the number of investors that view their plan, less than 1 dollar each. In order to view plans you must at least claim to be an accredited investor. They claim to have 5590 Investors representing $856M in capital. That's a pretty low average amount per investor... Anyone know someone who has successfully used their services?
Posted by bizfund at 11:05 AM
January 15, 2006
Business Finance is a Highly Fragmented Industry
Business Finance is a Highly Fragmented Industry
I have been surprised to learn how many different funding sources exist and how difficult it is to find each one. There is specific terminology that must be known in order to avoid the dreaded "That'll never work" that seems to be so common in finance. This rejection comes in many forms such as: "Why would I take that risk?" or "Not without real estate for collateral" or "You're wasting your time on this one". What fun! The frustrating thing is to learn that some deals seem fundable at first blush, then not fundable for a while, then, upon learning the right terminology, easy to fund!
Posted by bizfund at 11:54 PM | Comments (0)
Update
It's been a while since I got the idea for this site and launched it. I have spent the last 6 months investigating the world of finance, mostly as it relates to start-ups and early stage companies.
I wish I could say that I've learned a lot and am now an expert, but it feels like I have only begun to scratch the surface. I'm not going to attempt to impart everything that I've been working on but I would like to make a few observations that will hopefully be useful in my next few blogs.
Posted by bizfund at 11:28 PM | Comments (0)