Angel Investors 101

For fresh graduates or for employees who want to start their own businesses, one of the hardest things to do is to get the capital that they need to do so. This is because most of the traditional sources of loans or funding are apprehensive in providing funds for start-up businesses. Given this, most of them opt to shelve their business idea until they get the money they need. Some opt to sell equity, and some of them borrow the money from relatives and friends. However, people who want to go into business for themselves need not wait until they get the money from these sources because there is a good source of capital that they can tap into. All they need is a good idea and a strong business plan. This source is an angel investor.

What are angel investors?

Angel investors are either individuals or companies who put in money into startup businesses. However, their role in the business is not limited to being an investor because angel investors take an active role in the management of the business as a means of protecting their investment, which is why angel investors are usually businessmen themselves who are astute in handling businesses. There are three ways by which an angel investor can provide funds for a business. One of these is by providing money through a promissory note or a loan, which can be converted into an equity position in the company after the launching phase of the company. Usually, the investor would take about 15 to 30 percent equity in the company, which is enough to gain a set in the board.

The second way angel investors provide funds is through a cumulative convertible preferred stock option, wherein the investor defers the dividend payments he would receive from his stock, while he holds a seat in the board. The third way is for an investor to get an equity position right away when they put in their investment. In this set-up, they have an option to bring in one or two of his associates to help in the management of the business.

One good source of money that aspiring entrepreneurs can tap is an angel investor, which can provide them with the capital they need to launch their business. The good news is that apart from being able to get the money they need from these investors, they can also gain a number of benefits from the managerial expertise of the investor.

Write Winning Proposals For Venture Capitalists

You need to secure money for your project. You visit venture capitalists to see if you can get that money. A venture capitalist views your project as a pure investment. A venture capitalist has no emotional attachment unlike you. You need to write a proposal that is structured around a venture capitalists needs, not yours. What may interest you may have no relevance to your potential funder. You need a business plan that is ‘investor-focused’.

An investor focused business plan contains relevant information about your project. It addresses concerns, questions and should allay fears that any potential venture capitalist may have. It should meet their needs exactly. Venture capitalists exist to make substantial gains. They want to see a good return on investment. By compiling an investor focused business plan, it will be clear to Venture Capitalists that you are focused, prepared and competent.

There are four areas that need to be addressed:

Management Responsibility
Know Your Markets
Know Your Product
Know How Management, Markets and Product Make Money

Management Responsibility

The strength of management assigned to the project can make or break your proposal. Venture Capitalists need reassurance that you can manage their money. They will want to see a demonstrable track record in areas specific to the project you are pitching. The ability of management will be tested so be very prepared.

Know Your Markets

Venture Capitalists will need to see where your income will be coming from. Your company must demonstrate a strong understanding of your customer base and be able to fulfil their needs. Your plan also must address any potential new or growth markets. Illustrate any research you have conducted to emphasise this.

Know Your Product

Venture Capitalists will want to fully understand your product. They will want you to demonstrate how the product that they are funding will attract customers. The information in this section must be extensive and also feature any potential expansions or upgrades that your product will feature. This will show that you have thought about long-term growth.

Know How Management, Markets and Product Make Money

It must be demonstrated that management can create links and paths between customers and product. This element must be very strong as ambiguous information, or an assumed relationship will scare off any potential funder. Create a step-by-step guide of how their money will be processed and how the customers money will be received. This has to be clearly shown.

Tie in these points together and you are already in the top 3% of all venture capital submissions. Good Luck!

Private Equity and Venture Capital Financing Structures

There are several structures that Private Equity funds (also known as venture capital funds) use when they give the green light to fund a company. The basic structures for private companies are common stock and convertible preferred stock. These structures usually contain an anti-dilution provision, so the lead investor doesn’t start out purchasing say 40% of your company for $4,000,000 and then end up with only 5% because you dilute his stock position with subsequent financing rounds.

1. A Common Stock. Common Stock funding structures are pretty simple. The company and investor agree on a dollar amount to be funded and the percentage of stock, also called the equity position, the investor will receive. Most private companies, however, will find they have very little bargaining power with private equity funds. Usually, it is the money that dictates the terms of the financing structure. Part of the reason is that if you don’t like the deal terms you don’t have to take the money. Another reason is that Private Equity firms know which structures work for them and which ones don’t.

2. Preferred Stock. Private Equity firms use Preferred Stock structures the most. The Preferred Stock is convertible into Common Stock, usually anytime at the option of the holder. The convertible Preferred Stock can be convertible into either a fixed number of shares of Common Stock or a certain percentage of the Common Stock outstanding on a future date. Most Preferred structures also have a built in dividend. The dividend could range from 6% to 12%. This allows the Private Equity firm to receive some return on its investment before the Exit Strategy is used.

3. Debt Financing with an Equity Kicker. Another possible structure, if your company is already operating and profitable, or close to it, is debt financing with an equity kicker. Although this structure will be difficult to get from a Private Equity firm, it is worth exploring.

You are more likely to get this kind of financing from Angel investors. Maybe even family and friends would even provide this type of financing if the amount is not too large and you have good cashflow. Say you feel $200,000 can get you over the hurdle and profitable. Structure the $200,000 as a 3 to 5 year loan and give the investor 10% of your company in common stock. The number of shares and percentage you give the investor/lender is based on the size of the loan and the value of your company. I only used 10% as an example.

4. Convertible Debt.Some investors will structure their funding as a convertible note or convertible debenture. This security is convertible at their option into Common Stock of the company. Usually they will not convert until the Common Stock is trading and they can get out of their position.

Smart investors will also use what is called a "4.9% Clause". I have used this many times for my private investor and hedge fund clients. Certain securities laws require investors that own 5% of more to make certain filings with the U.S. Securities & Exchange Commission (SEC). This allows investors to get around that requirement since the 4.9% Clause does not allow the investor to own more than 4.9% of the company at one point in time.

Also, if an investor owns more than 10% of a company they are deemed an "Affiliate" and a number of other rules kick in. An investor can remain more nimble with his investment without having to comply with these regulations. The 4.9% Clause also benefits the Management Team. If the investor can't own more than 4.9% of the company it is very difficult for the investor to take over the company or make management changes.

5. Reverse Mergers. A Reverse Merger is when an existing private company merges into an existing public company with a stock symbol, which is usually a “shell company”. A shell company is a public company that although still in existence and having a stock symbol, is no longer operating a business. The business plan obviously failed and that company went out of business, but the public entity or shell still exists. This is the key ingredient in the Reverse Merger.

Free Angel Investors

In recent times, aspiring entrepreneurs have seen the benefits of tapping into an angel investor to get the capital they need. This is because of the numerous benefits that they can get out of the funding and the managerial expertise that angel investors provide them. As a result of the demand for angel investors, some companies have started to provide services to aspiring entrepreneurs in the form of assistance in helping them find and meet with angel investors.

However, some of these companies charge very high fees without the assurance that a deal would be closed with an angel investor. Given this, there are times when an entrepreneur looking for capital ends up spending thousands of dollars on a "wild goose chase" for an angel investor through these companies. The good news is that aspiring entrepreneurs need not spend an enormous amount of money because finding an angel investor can become a fairly easy and "free" process.

Some tips on finding an angel investor

Before beginning your search for an angel investor, one of the most important initial steps that you need to take is to know exactly what you are looking for regarding the type of angel investor you want to deal with and how much you need. This would involve concucting research on some angel investors, including looking at their experience, their holdings and their investment profile. After doing this, you can now begin your search for angel investors.

As a rule of thumb, you should try to look for an angel investor who is based in your area because they usually want to invest in a business that they can monitor from a "safe distance." One of the best sources for leads for angel investors are the networks that businesspeople belong to like trade and business organizations. Given this, you should try to gain membership to such organizations so that you can have access to a network that could help you find an angel investor. Lastly, you can always go to the Internet, which can give you several leads on angel investors on top of the information on angel investors that you would also need for your search.

Looking for an angel investor need not be a very expensive process. This is because, given the good sources of information like the Internet and networks that entrepreneurs can tap, you can search for the right angel investor for you business on your own. You don't have to pay exorbitant amounts of money for companies to do the search for you.

Angel Investor Advice

For entrepreneurs who are looking for an angel investor to help them with their capitalization needs, one of the most difficult things to do is to actually meet with an angel investor and present his or her business plan. However, there are a number of things that an entrepreneur should bear in mind with regard to angel investors so that he will not have to worry too much about what will happen during the meeting.

Before the meeting

One of the first things that entrepreneurs should bear in mind is that even before an angel investor agrees to meet with him or her, the angel investor probably already has an idea of who he or she is. This is because of the fact that angel investors make it a point to "screen" who they meet with, and, as much as possible, they want to be introduced to entrepreneurs by a trusted friend or relative so that they would have a "reference." This is because they want to meet with entrepreneurs whom they can have confidence in and trust.

If an angel investor is a family friend or was introduced by a friend or a relative, it would be good to hold a "pre-negotiation meeting" before the big meeting by inviting the investor to gatherings or parties. This is because doing so can allow the entrepreneur and the investor to get to know each other better before the meeting, which can also serve as a good opportunity to make a good first impression.

During the meeting

During the big meeting, an entrepreneur can build on the first impression that he has made by coming to the meeting prepared to effectively present his business concept and to answer any questions that the investor may have. To be able to do so, he or she must prepare a good business plan and bring some very important tools like a calculator, which can help him assess his business needs given the different options he would be presented with during the meeting. In case the investor agrees to invest, it would be a good idea to draw up a letter of intent. However, if the investor is a friend or a close family friend, a simple verbal agreement and a handshake would suffice before the papers are prepared.

To help relieve some of the anxiety that an entrepreneur goes through in looking for an angel investor, there are a number of ways by which he or she can make the meeting with an investor more pleasant. Some of these include holding a "pre-negotiation" meeting and preparing well for the meeting in order to leave a good impression with an investor and increase the chances of signing an investment deal.

The Money Pitch

The “Money Pitch” begins with the presentation you make when you send investor groups your business plan. Your business plan should be detailed, but concise, and in addition to containing an Executive Summary it should also state your financials, preferably audited financials.

Your Business Plan should also contain a detailed “use of proceeds” section. In this section you should state the exact amount of funding you are seeking and break it down so investors can see that you put thought and research into how you arrived at the total amount you are seeking. I have reviewed Business Plans from many clients and development stage companies. More than a few were poor estimates that were not well thought out. The amount you are seeking should also directly relate to that section in your business plan that shows your projected financials.

Investors will not want to fund your company $3,000,000 (for example) if in 2 or 3 years you can’t at least generate a multiple of that amount in gross revenues and achieve some sort of significant net profit. This is important because the investor group needs to consider its Exit Strategy even if that is 3 to 5 years after they fund your company.

Let’s break this down so you can understand the thought process of a venture capital or private equity firm that is going to make a funding decision regarding your company. By understanding the goal they want to achieve on their investment this will help you in preparing your business plan, obtaining the funding you need and achieving your goal.

Let’s say you are looking to raise $3,000,000 for expansion of your specialty hardware company and will give up 40% ownership in your company. The venture capital or private equity firm is thinking, we are investing $3,000,000 and are looking to get back $6,000,000 or more in 3 to 5 years. Now, if you can convince them that your company can use that $3,000,000 to increase its current $500,000 net profit to $2,000,000 then you probably have a good chance of getting your funding.

Here’s the reasoning. If the private equity firm owns 40% of your company and you go public or do a “reverse merger”, then using a low price-to-earnings ratio of 10 would mean your company would be worth $20,000,000. This is 10 times your $2,000,000 net profit and gives your company a $20,000,000 market capitalization. So if the venture capital or private equity firm owns 40% of your $20,000,000 company they can sell their stock for $8,000,000 and be very happy with the profit they have made.

Now let’s take another example. Let’s say instead of going public, you decide to sell your specialty hardware company to another much larger hardware company. The larger hardware company may only pay one times your gross earnings, or a little more depending on patents, technology, equipment and how strategic the acquisition of your specialty hardware company may be to them. So if your company has gross revenues of $8,000,000 and a larger company will buy you out for $10,000,000 then the private equity firm would get back 40% of that amount or $4,000,000 and still be happy with its profit.

Now that you can see the minimum end result that private equity firms are looking for, you just have to make sure that your use of funds can achieve the end results they are looking for so that you can obtain your funding and execute your business plan.

Different Types of Funding

Finance for business can be obtained through a number of different sources.

Let's review some of those channels to help you decide what's right for your business needs:

Grants

There are over 930 different EU and UK grants and loans available from over 100 issuing bodies. This is the cheapest form of finance and an important part of the funding package that companies and individuals need. We can help you find your way through this maze.

Technology

• Micro Projects: 50% of eligible costs up to £20,000
• Research project: For a technical and feasibility study of an innovative idea for new technology 60% of costs up to a grant of £75,000.
• Development project: For development up to pre production 35% of costs up to a grant of £200,000
• Developing an innovative idea: valuable for small companies and individuals at the start of a technical project: 75% of costs of hiring a mentor and consultants.

Export

To start exporting or moving into new markets grants of 50% of costs up to £20,000 each.

Training and Education

Knowledge Transfer Partnerships, Achieving Best Practice in Your Business, Investors in People

Modern Apprenticeships

New Deal for various grants.

Environment

BOC Foundation for the Environment: 25% to 50% of Project cost, typically £20,000 to £100,000

Clean up Fund: Emission reducing equipment up to 75% of cost

Community Chest Fund: Up to £25,000 for projects near active SITA sites

High Impact Fund: £150,000+ for larger projects near SITA sites

Assisted Areas

Regional assistance grants of between 10 and 35% for capital expenditure in less favoured areas of the UK.

Loans

Loans are an excellent source of finance if you have suitable security to borrow against or a reliable earnings stream. This needs to be planned and presented well to obtain funds.

Credit cards

Provides up to 56 days free credit if you play the game!

Overdraft

Banks are surprisingly supportive when presented with a well thought through plan and competent management.

Bank Loans

Lenders tend to look for a good business plan and security. Typically the loan is approved by a centralised back office function rather than the person you meet. Terms and rates depend upon the risk. Repayments can be very flexible to meet your specific needs.

Mortgages

These can include flexible repayment terms to meet your business needs. This can even be incorporated into your overdraft finance so that you have one flexible account for both personal/ business mortgages and overdraft

Small Firms Loan Guarantee Scheme

Up to two years trading: Up to £100,000

Over two years trading: Up to £250,000

However these are difficult to obtain and are a loan of last resort.

Export Guarantee Scheme

This is government backed insurance against appropriate export documentation.

Mezzanine

This is a halfway house between loan and equity. It can be an innovative way of raising funds for the more established business. Mostly for expansion capital.

Equity

This is not as easy as the papers would have you know. Only 1% of business plans received by Venture Capital Funds are successful. However, a good business proposition consisting of a strong demand for the product or service, management track record and a sound financial plan will enhance the chance of success.

Business Angels

These are high net worth individuals who are successful businessmen looking for investment opportunities. They can provide both time expertise and money. Typical investment size is £25,000 to £250,000 but can go as high as £2m for the right opportunity. Exit within 3-5 years.

Venture Capital

These are investment funds seeking high rates of return. However typically investments are over a million pounds. Some funds are targeted at lower amounts depending upon the sector and region. These funds are looking for exponential capital growth over 3-5 years.

Asset backed finance

This can cover machinery, sales invoices even sales orders. It can be a very flexible source of finance to the growing business

Leasing

This will cover your capital expenditure and spread the cost over a three to five year period. It is particularly useful if you do not have taxable profits to maximise your capital allowances.

Sale and leaseback of a property you own is another good source of funds.

Factoring

Factoring offers a sales ledger administration and debt collection service. Up to 95% of an approved sales invoice is paid within 48 hours, quicker if required. Credit protection is also available to protect against a bad debt. The Factor will own and place a first charge over the book debts and they might also take other charges, depending upon the strength of the financial information.

Invoice discounting

Invoice Discounting can be Confidential or Disclosed; it depends upon the strength of the financial information. The service is the same as Factoring, except that the sales ledger administration and the debt collection is the responsibility of the client and not the Factor. Pre payment of the approved sales invoice is still up to 95% and the factor will still have a first charge on the book debt and therefore own the debt. This service can also have credit protection cover. All sales invoices need to be for a business to business debt, and some proof of delivery is generally required.

Trade Finance

This is funding provided against stock purchases, signed contracts and orders whereby the funder will prepay a certain percentage of the value

Pension fund

It may be possible to use your pension funds for a loan back to the business

Business Relationship Funding

This is another source of funds that can be overlooked. It may be possible to introduce potential alliances to add value to both parties. It may produce an ultimate exit route in the medium to long term.

• Joint Ventures: Requires a legal agreement embodying the deal and another company
• Partnerships: Two companies collaborate with possible funding.
• Joint working relationships: These are an informal partnership which may be more project specific where the parties can share resources.
• Agencies: These can be geographical or product specific and generally incorporates a payment for the right to the agency.
• Distributors: Very like an agency but may not necessarily involve up front payment.
• Alliances: These do not require a separate company and can be embodied by a legal agreement to work together.
• Trade investors: Otherwise known as Corporate Partnering. This can be a good way to involve a much larger company in the business with a view to possible trade sale further down the line.
• Associates: This can be a loose arrangement with no fundamental commitments either way, rather like a preferred supplier.
• Equity Swop: Two companies exchange shares to a similar value to develop both businesses.
• Franchises: This can allow the business to grow without further direct investment.
• Licensing: This involves licensing a product or service to enable others to sell it. This requires you to own the intellectual property.

Medical Angel Investors

As with any investor, it can be expected that an angel investor would only put his money into a business that would provide the least risk on his investment. This is reflected in the investment decisions that such an investor would make, especially in the types of products or services that a business provides. Usually, angel investors invest in businesses that have the potential for long-term profitability. In recent years, the preference of angel investors has been in medical devices and medical related services, including medical billing services.

As a result, entrepreneurs who opt to go into businesses that make medical devices and provide medical related services have found it a little bit easier to get the interest of angel investors. However, this does not mean that anyone who decides to go into these kinds of businesses would get an angel investor to invest just like that, as there are things that entrepreneurs need to do first before they can sign a deal with an angel investor.

What angel investors look for

Apart from a presenting a potentially profitable product or service, businessmen need to prepare a number of things and equip themselves with a number of skills that would increase their chances of landing a deal with an angel investor. Among these skills, one of the most important is competent management skills. In addition to this, an entrepreneur needs a good business plan, which identifies the size of the market, the competitive advantage of his business, and financial forecasts.

On the other hand, there are also a number of things that entrepreneurs should avoid when they are presenting their business concept to an angel investor. Some of these include and having unrealistic valuations for the purpose of making his business more attractive. This is because angel investors are very astute businessmen, and they can tell if you are trying to fool them. If they catch you doing it, you can kiss their investment goodbye.

Recently, angel investors have become very interested in the medical field, which has made it easier for entrepreneurs who are in the field to gain access to capital. However, even if an entrepreneur is in the right type of business, there are still a number of things that an entrepreneur needs to prepare and skills that he has to learn before he can land an investment deal with an angel investor.

How to Become a Cheesy Venture Capitalist

Many entrepreneurs see themselves someday as becoming venture capitalists because they think the venture capitalists are the people with all the money. Indeed, over time many of them have made a huge killing and many have lost a small fortune. It is amazing that so many people look up to the venture capitalists and of those in the know often referred to them as vulture capitalists, because really that's what they are.

But he with the gold makes the rules and that is the game. If you want their venture capital money that you have to sell your soul and go along with their game plan, which is probably a return on investment of 10 times their initial first round of funding within three years.

If not the company will be salt and all its assets and they're cashing out, whether or not they made any money. Why do they play the game so tight, because it is a disciplined game and that's the only way they have found it works. If you have fallen in love with your business plan and your entrepreneurial dream did venture capital is not the way to go.

If however you just want to make money and you really don't care and you have a really good idea at the right time in the marketplace that you might find excellent company with a venture capitalist.

Once you do two or three deals this way and become what they call a serial entrepreneur then perhaps you are ready to play on their side of the fence and become a cheesy venture capitalist. And I mean that in the most sincere way. Truly I do, I just love them. Consider all this in 2006.

Raising Money for Treasure Hunting

The world of treasure hunting and gold can posses people. It has me and many other people. But the fact remains that treasure hunting can be funded and successful if they step back from the enthusiasm of the project, and operate on a rational level.

Treasure Hunting is a business as well as a passion. If you can be grounded on the numbers and the research, your enthusiasm will sell the project.

Anyway this guy and another guy were trying to raise money in $20-$100 per person. I simply could not understand why the were trying to raise such a small amount of money from like 500 people. It just seemed like a waist of time when they could have asked for $2-$5,000 from each person. I would not have invested and money with these 2 people because they are lost in a dream and not organized.

They had no plans and there research was weak. They also had no idea on how much is needed for treasure recovery or even how much money they needed at all. They had no planning so there is little to no chance of them being successful.

Just because you think you know where a treasure is does not mean you have any idea on how to pinpoint and recover it. That takes money...Lots of it.

For an underwater pin pointing and recovery takes time and money. The fact is they were looking for about $6,000 total from 500 people. There is no way this is enough money for their projects. Also getting 20 bucks from 500 people is going to be a huge problem.

It would be so much easier to find 5 people who want to invest $2,000. They would have fewer people to deal with and $10,000, that is 4 thousand dollars more than they would have got at $20 from 500 people.

They are disorganized and trying to get money from the wrong people. There are people who have thousands of dollars lying around just looking for the right way to invest it. They can be sold the dream if your numbers and organization is sound.

I just do not understand some people.

Venture Capitalism and Funding Your Idea

Do you have a great idea for a business? Sure you do, who doesn’t, but the question is how do you raise the capital to start this great business or fund your new invention. Perhaps it is a technology device or perhaps it is a simple solution that is needed and you intend to fulfill that niche?

Hey, let’s face it there have been some wacky inventions or ideas, which have made millions right? Indeed, the Hoola Hoop for instance, but that is just one idea of 1000’s, which have retired their creators rich.

Okay so you have a perfect invention and for the sake of argument let us say it is a Automatic Dog Frisbee Thrower Machine. The Frisbee fires off and spins some 100 feet and the dog runs and gets it. Then the dog returns the Frisbee and puts it into the shoot like the hopper of a Tennis Ball Machine, again away goes the Frisbee. After 3-times it gives the dog a treat and after ten times it fills the water bowl up; great invention right?

Yes, smart thinking, now you need funding, perhaps 500,000 to a million dollars to make the machine, market it and start your company. Now they you design a perfect business plan and start submitting it to venture capitalists. But wait, you see they do not want you business plan, they want only an executive summary.

So be smart and save the trees, send them two-pages of summary and call them back in a week. They are interested in maximizing return on investment. They want all their money back in times ten in 3-years and then perhaps sell the whole company out or take it public. So if you want VC money, you need to know that up front first off. Consider this in 2006

So You Want Venture Capital Do You?

So often when folks ask me for advice on business they mention they want to get funding from a Venture Capitalist who specializes in funding projects in a certain industry. I then say; So You Want Venture Capital Do You? Are you totally sure about this? I mean they do often call venture capitalists; Vulture Capitalists right. And one would think there is a reason for all this labeling, libeling and name-calling. Indeed there is.

Venture Capitalists often do business quite a bit differently than you might imagine and they are serious about how they do it. They have the money, you and they both know it. You need and both you and they know that too. There are hundreds of other deals better than yours out there and they know it and you should too. Of course as an entrepreneur you are probably in love with your idea and may I make a statement now.

If you are truly in love with your idea and you want to do this the rest of your life then you are probably barking up the wrong tree with looking into getting Venture Capitalists involved in the financing of your project, business and plan. You see they want in and want out and they are looking at 36 months tops, max of 48 and that is if you are producing numbers and supporting yourself at that point. Consider all this in 2006.

Confessions of a Venture Capitalist

Venture Capitalists are often called Vulture Capitalists and until you read the book: Confessions of a Venture Capitalist, Inside the high-stakes world of start-up financing by Ruthann Quindlen; well you probably will never understand how they got that slanderous title. In the book Ruthann explains what it was like working in Silicon Valley in a Venture Capital Company prior to the dot com bubble burst.

If you are considering getting venture capital for your startup company then perhaps you should read this book. After all would you like to sit down for a cup of coffee with a venture capitalist who has been in the industry for years before you go in pitch your business plan? In the book they describe how venture capitalists will work with many companies at one time expecting that one or two may make it to a huge payout. The rest they expect to either break even or lose money and they will eventually dump.

The world of venture capitalists is about return on investment in a very short time period and they are not looking for just making a profit they are looking to make 10 times or more the money they invested. There are many venture capital firms and often they bet on the jockey and not just the horse. A business idea or concept may be very good, but if the entrepreneur is unworkable the venture capitalists will have to pass. Please consider all this in 2006.

How To Find Money To Start Your Own Business

The most common road block to starting your own business is money. Unfortunately the freest way to get money (grants) has miniscule availability for business start up plans. If you are a non profit organization, the chance will be higher of receiving a grant. However, most new businesses are probably looking for profit. So how do you find money to start your business?

As mentioned, earning a grant is extremely difficult. Two clear situations have grant possibilities. First, if an individual has a very clear purpose deserving of a grant, it is possible to receive one. Second, but also along the same terms, you may be able to receive a grant if you are doing particular research with an outcome that benefits a government agency.

The Small Business Association (SBA) does not typically help owners find a grant. They can however be a great resource. If you access the SBA Web site you can find topics to help you with your business. The SBA also offers loans for your business that vary from small to larger amounts. Use the Web to gather loan information, ask questions and locate someone near your area to assist you. If a loan via the SBA is not possible, research several bank opportunities. Banks have a variety of different loans available.

You should be able to locate a bank that offers a loan fitting with your company's needs and financial abilities. If you decide to take out a loan, make sure you have committed to realistic payments. Your business idea is great and the business will soon be profitable; you can afford to extend the loan a little while. However, if you lose the business because you can't make payments, there is clearly no success.

An additional option is finding investors or selling commerce stock. Investors can be very valuable resources, but keep in mind that any investor also becomes part owner. Before making that commitment be sure the business's goals, values, mission and ethic are clearly described, written out and agreed upon. You started this business with something specific in mind; don't hastily lose that to an investor.

Lastly, a viable option that may require some groveling is to ask friends and family for their support. Friends and family will know first hand how important this business is to you. If the financial and relationship status allow for "donations" by friends and family, this could be a tremendous asset to your business. If you are having trouble with bank loans, it may be acceptable to set up a loan type agreement between a friend or family member. This allows you to create a financial plan that truly works for you, and may allow for some leeway if payment difficulties arise. Do not take advantage of this possibly good situation. Just because the "bank" is someone you know or are related to, payments made on time and of the agreed amount is still crucial.

Venture Capital for WiMax on the Rise

Looks like we are seeing some movement in the venture capital world for fast movers and entrepreneurial companies competing in the WiMax sector. In fact recently we watch Aperto Networks receive another round of 26 million in capital bringing them to 120 million dollars in total capitalization. You might know Aperto as a major developer of WiMax base stations and units for subscribers.

Apparently the next generation of WiMax is coming and almost here and investors are looking for big returns in the near future as more and more implementation of WiMax systems occur. WiMax is also a good solution for the VoIP issues that occur due to bandwidth loading, as well as video applications or even hybrid cellular service.

It appears that venture capital funding in this wireless communication sub-sector may indeed continue for several more years and Aperto Networks seems to be gaining serious steam in the market place thanks to their funding partners and PacketMax system innovations.

The company has also recently partnered with ADC, which makes the Digivance wireless LANs, which have become so popular. This also opens up doors for distributed antenna systems and high gain amplifiers, which will make the over all systems more robust. Please consider this in 2006.