How to increase a business capital-tips?
 

Hi, my friend is assuming to start a small business, I query that to start any business what is a good business representation that would increase a capital without charitable shareholders run of business. Guide me, thanks in advance.

Re: How to increase a business capital-tips?
 

Hi,

It's not very clear to me what you're asking... Are you asking how to raise capital for a business?

Anyway, if so, keep in mind that there are generally three reasons (that I know of anyway) that a person will invest in your business...

1. They're your Mom or Dad, and they want to help get you going. :)

2. They're hoping to make money in the end. That is, for example, if they invest $10,000, they're hoping that in 3 years' time, their share of the company will be worth much more than that.

3. They get "excited" about the kind of business you're in, and would love to be "involved" in that kind of business in some way.

I have a friend who started a business during the "dot com boom" days. She got all her initial money from angel investors, not venture capitalists. (She was planning to later go to venture capitalists, but then the bottom fell out of the dot com boom before she got to that stage...)

Anyway, venture capitalists are pretty much always going to be "no. 2" type investors. If they don't see a potentially BIG return in it happening for them, then they're not interested.

On the other hand, angel investors (that is, rich individuals who are looking to invest their money) are a more varied bunch. Some are very "hard nosed" and fit into category no. 2. Others are more "emotional" about it all, and may fit better into category no. 3. Depending on what your business is about, your previous business experience, the experience of others working with you in your business, and so on, it may be easier to appeal to "no. 3" type investors than the "no. 2" types. Anyway, it's something to keep in mind... :)

One example of the "no. 3" type of investor are people who invest in independent films. Often, the investors will get screen credits as "executive producers" as part of their "payment" for their investment. That's partly because these are usually high-risk ventures, and they may never see their money again! Many people who invest their money in independent movies probably do it more for the "excitement" of being part of the movie industry, than to make big bucks out of it (since it's so risky).

Best of luck,

Dien

Re: How to increase a business capital-tips?
 

Hi, i Looking into a safety compliance and recycling operation. What will be the best capital raising avenue to take while avoiding the big bank bureaucracies?

Re: How to increase a business capital-tips?
 

guide me.........

Re: How to increase a business capital-tips?
 

I think your best bet (apart from friends and family) would be to seek out angel investors. There are angel investor networks you could try...

However, make sure you have all your "ducks in a row". How much money do you want, and what are you planning to give in return? Are you giving part-ownership (selling part of your business)? Or are you seeking a loan which you'll repay with interest? Or both?

What assets does your business already have? Who is part of your team - and what is their experience in this area? (If you don't have people with experience in this type of business, then you may want to try to get some, at least in an advisory role, but even better as people who will be involved in the day-to-day running of the business... It will add to your credibility.) Do you have a business plan? Many investors like to see one...

Getting investors is really a form of sales, and you have to hit all the points. What you are selling is part-ownership in your business. Know very clearly what you want (how much money), what you're willing to give in return (what percentage of the business, that is), make it sound exciting, point out the potential profits, bolster up your credibility (a good "team" with experience in the industry, and a solid business plan will help with that last point)... If this business is in a growth industry, make sure you point it out. I'm sure I've missed out some points, but those are some important ones...!

- Dien

Re: How to increase a business capital-tips?
 

I'll just add that one thing that some investors will ask about is how much money YOU have invested in the business, or how much do your friends/family have invested in it?

If you don't believe enough in the business to invest your own money, or to encourage your family/friends to invest in it, they may see it as a sign that you don't really have confidence in your business at all, and they may stay out for that reason... Anyway, keep that in mind...

- Dien

Re: How to increase a business capital-tips?
 

I don't know if you watch the BBC's Dragons' Den programme - where entrepreneurs pitch their business to gain investment from the wealthy Dragons. Here's a link to the presenter's guide to gaining an investment ...

http://www.bbc.co.uk/dragonsden/evan/

Best wishes
Margaret