1. Taking your company public. Although security laws in the U.S. have made it much easier for businesses to go public,and offer stock as a way to raise required funds,this is still most likely the most risky option. It is generally not an advised choice for brand-new or really small companies. Consulting with an experienced attorney ahead of time is crucial because of the number of legal problems included. There is also a lot of tension associated with running a public company,and a considerable loss of autonomy and control. Before making this choice,be absolutely sure that this is the best strategy for your business.
2. Getting money from family members. Yes,it can seem like begging,and it’s a difficult thing to need to swallow your pride. Surprisingly,in a recent survey,almost 30% of entrepreneurs said that they raised all or part of the capital they required through family members. Make sure that you have your attorney draw up a regular organization agreement if this is your option. When approaching relative,speak to them about their financial investment the same method you would any other outside investor. Tell them about how much money they can make,not about just how much you need their aid. And make sure that you keep to your end of the arrangement.
3. Using your cost savings or charge card. This is the most typical method for business owners to raise required company capital. Before picking this approach however,talk with your monetary consultant. You wish to take a look at the long-term repercussions of utilizing your cost savings,life insurance coverage or credit cards,specifically on the occasion that your company venture fails,or does not generate the predicted return on investment (ROI). If you do end up financing your project using credit cards,make certain that you search initially,and find the card that will use you the very best rate and provides you the most “bang” for your dollar.
Before even looking for venture capital,look at your business from an outsider’s point of view. (Contrary to popular belief,your business does not have actually to be involved in high tech to draw in venture capital). Your next step must be to look at your “circle of influence” and see if you know somebody who can offer you an individual introduction to someone at the venture capital firm.
5. Surprisingly,one of the most typical methods (especially for brand-new companies) to raise equity capital,is by welcoming your potential or present workers the opportunity to end up being investors. Again,prior to going this route,talk to your business lawyer,and put policies into location that plan for potential issues. Or a staff member gives up and goes into competition with you after learning all of the business tricks?
This is a lawyer that can assist with business and related issues:
No matter which choice you make in trying to find equity capital,by planning ahead,doing your research and following the recommendations of your attorney,you’ll increase the possibility of raising the cash you need and making the relationship between you and your financiers a rewarding one.
