Jun 022017

How To Get A Small Business Loan

So, you need some capital to get your business started or to grow your existing business and you want to know how to get a small business loan.

First, let’s be clear: a big part of a lender’s decision to give you a small business loan is based on your personal credit history. Unless you are an established business with a long credit history and sizable revenues and cash flows that can clearly support debt repayment, the lender assumes that the loan is as much to you as it is to your small business.

What are the implications of the lender believing that they are lending to you as much as they’re lending to your small business?

Most importantly, the lender will look to see that you have a good credit score and credit history. Before giving you a small business loan of any size, they want to see that you have a history of responsible borrowing and repayment.

Also important though, is that you understand that the lender is likely to want you to provide not just your personal guarantee on the loan, but they will also want you to promise as collateral specific assets that you own outright or have substantial equity in. This could, and often does, include putting your home up as collateral for your small business loan.

Next, you need to understand that by lending you money, typically the lender’s only real upside is that you pay them back the principal that you borrowed, plus the interest that you owe over the period of the loan. Since they’re not equity investors in your business, unless there is some kind of equity “kicker” on your loan (such as warrants to purchase shares of stock in your company at a certain price), the interest you pay to the lender on your small business loan is the only “profit” they’ll see from the deal.

So, if the lender is not going to see any upside other than the interest you pay, and your startup or otherwise “small” business is considered a fairly (or very, depending on the situation) risky investment, you can assume that you will be paying a relatively high interest rate to borrow money. That said, if you can obtain an SBA loan (a loan that is largely — usually 80% — guaranteed by the Small Business Administration), which greatly reduces the risk to the lender should your business default on the loan, you will typically enjoy significantly lower interest rates.

Finally, for now, realize that going to a large bank, such as the one where you likely have your checking account and possibly your mortgage loan, is not necessarily the best route to go to obtain a small business loan. While it may work out fine for you, you will likely go through a much more stringent and time-consuming underwriting process, with a lower probability of success in obtaining the loan. The situation may improve a bit if you are seeking an SBA loan, as some of the larger banks tend to be big players in that space and for certain SBA loan programs may even have a streamlined application process.

Often though, it may be more efficient and effective to make the initial foray on seeking your small business loan by looking to online lenders. Such an approach may lead to higher interest rates, so be careful to completely understand what all the costs of your loan will be (origination fees, closing fees, interest, collateral at risk, etc.) before you sign on the dotted line. That said, the requirements of online lenders are sometimes not quite as stringent as those of the larger “brick and mortar” banks, so if your credit or other underwriting factors are not as strong as they could be, an online lender may be your only choice. The list of such potential lenders for small business loans is long. At present, it includes the following lenders, among many others:





For more information on SBA small business loan programs, check out:


Whatever loan programs you consider and whichever lenders you investigate, make sure you do your homework and make sure you very clearly understand the terms and conditions of the loan fees and repayment schedule and costs you are committing to! This is a very important decision for the future of your business and for your financial future, so you don’t want to overlook key details in a rush to get the loan funds in the door.

Also, realize that there are other ways to fund your startup or existing business, besides small business loans, so before you commit yourself to a particular funding source, make sure you have explored and understand all your options for raising capital.


Paul Morin




Aug 162011

3 Common Small Business Killers

Small businesses, even those that appear promising at the start, have an unnerving failure rate.  Here I’ll discuss three common small business killers, and what to do about them.  In my extensive time in entrepreneurship, I’ve experienced and seen them all, in my own businesses and those of my clients.  The good news is that if you are aware of these issues and keep vigilant watch, you can spot them early and often prevent them from killing your business.

Common Small Business Killer #1:  Insufficient Funding

I guess this one should come as no surprise.  Most businesses are started on a “shoestring budget” and tend to stay that way through most of their lives.  While this may be unavoidable for some who are starting a business, for others, it is simply an issue of not understanding the likely capital requirements of the business and planning accordingly.

Solution:  Perform a break-even analysis before you start your business, so you can get a basic understanding of the sales volume you will need to break even.  This will, of course, involve making many assumptions and it will never be perfect, however it will at least give you a target and a basis for understanding where you need to take the business.  It will also help guide you as you put together your pro-forma financials, including a cash flow projection, which will help you understand when the business is expected to start generating, rather than burning cash.  Realize that if you make your projections too “rosy,” you are likely to miss them and run into cash flow problems.  Project conservatively and leave yourself a buffer for projection error.  Finally, make sure you understand the potential sources of capital available and stay ahead of your capital requirements, so you’re not in a compromised position, trying to raise cash in an emergency.

Common Small Business Killer #2:  Weak Profit Margins

Some businesses have inherently weak profit margins, due to a variety of factors, but usually because of intense competition and the pricing power of key suppliers.  If you know from the get-go that you are entering a business with weak margins and little hope of improvement in that area, you’re either crazy, don’t realize this issue, or have some other ulterior motive.

Solution:  Before you enter any business, make sure you have a very good understanding of the profit margins of the business.  In particular, you should look for gross margins of sixty percent or better.  I will agree with you that such businesses are not easy to find, but as one of my first mentors told me, when you have gross margins of sixty percent or better, you can make a lot of mistakes in the remainder of your business and still survive to fight another day.  Make sure that as you are putting together the pro-forma financials for your venture, you are very realistic regarding the direct costs you will have in producing your products and/or delivering your services.  Any unrealistic assumptions regarding these costs will give you an inaccurate picture of the likely gross margins you will enjoy in your business and make your pro-forma financial projections misleading and dangerous.  Likewise, be very realistic about how you will be able to price your offering, as this will be the other determinant of the gross margins you will be looking at.  Finally, be realistic about how these direct costs and pricing power are likely to change over time, given the competitive forces and other market trends you see at work in your industry.

Common Small Business Killer #3:  Unskilled Management

The unskilled (or under-skilled) management issue occurs quite a bit.  Two scenarios where this issue is particularly common are: 1.) a person comes out of a larger corporate environment with a very specific skillset and decides to become an entrepreneur; and 2.) a family business employs its family members in key management and leadership positions, regardless of the fact that they don’t have the experience or the skills to do the job well.  There are many other situations where entrepreneurs do not have the proper skills to run the business they have chosen, but these are two of the most common.

Solution:  When you are starting a business, or even if you already have it up and running, take a close look at the types of skills that will be necessary to run and grow the business effectively.  If you are not sure what it takes to be great at your endeavor, take a look around at those who are already succeeding in the same or similar businesses.  Take a close look at the core skills and knowledge they employ to allow them to do well in that business.  In some businesses, the most important competency is financial acumen, in others it’s operational knowledge, in most all, it’s marketing and sales capabilities.  Make an honest assessment.  Where you see gaps in your knowledge and capabilities, partner with or hire others to fill those gaps.  Remember when you’re doing this assessment that, regardless of how talented you may be, it will be very hard for you to have the time, energy and capabilities to do all tasks well.  Be sure you have the most critical ones covered and seek assistance everywhere else.

It’s important to understand that these are just three of many potential “small business killers,” but start with making sure you have these three under control and we’ll cover some others in the future.

I look forward to your thoughts, comments and questions.  Leave a comment below!

Paul Morin



Apr 162011

business plan basicsIf you’re starting a business, everyone knows that you have to have a business plan, right? Well, you may be surprised to hear that many of the greatest businesses we know today were started without any business plan. In fact, in my opinion, writing a business plan is not the first, but the eighth step in starting a business. That being said, I do think it’s important to have a business plan, even if it’s not a fancy 100-page document. The process of putting the plan together, if not the physical plan itself, can have great value in how you think about and grow your business. So, if it’s a good idea to develop a business plan, what should the plan contain?

The contents of a business plan are somewhat subjective and what is considered essential will vary based on the expected audience for your plan. Even so, there are some elements of a business plan that are required, regardless of whom the audience will be. Those essential components include the following:

Executive Summary: all plans should have a brief executive summary at the beginning, and given that many readers will never make it past this section, it should be concise, well-written and full of key information that will pique the interest of the reader.

Problem Description: this section must make very clear the problem that your product and/or service will solve. It should leave no doubt that you are not speculating that such a problem exists, but rather have done sufficient primary and secondary market research to confirm that there is a real need in the market, and one that people or companies are willing to pay you to solve.

Overall Market Description: here you will want to provide as much pertinent information as you can about the market. It’s key to keep the information relevant to the problem you are solving. Try to get as much current data as you can and try to size the market, both in terms of the number of potential customers and the potential dollar volume per year. Provide an indication of expected growth or decline in the market over the next five to ten years.

Market Niche(s): Now that you’ve provided an overview of the market, it’s time to talk about the various segments or niches in the market and specifically, go into greater detail regarding those you expect to target. Discuss why these segments are most relevant and attractive from your perspective and indicate how you expect to go after them. It is also important here to provide an indication of the size of these segments and how they fit into the overall market that you described above.

Products/Services: While you may have touched briefly in Problem Description on the products and services you will be offering, this is where you’ll go into greater detail, including how they will solve market needs better/cheaper/faster than the solutions currently available. Here you will want to cover the important characteristics of the offering, as well as the various versions you expect to bring to the market, based on the unique needs and desires of the particular niches you will be targeting. It is in this section that you will also cover the pricing of your offering and why your intended price points make sense in the context of the existing market and its expected evolution.

Competition: The first key point to make regarding competition is that as you think through and develop this section, remember that there is always competition. While there may be no competitors do exactly what you are expecting to do in the market, if a need exists, without a doubt there are alternative or substitute solutions being proposed to the market by other providers. There are very few situations where this is not the case. So, do yourself a favor and acknowledge that there is competition, however minimal or ineffective it may be. You will want to describe the existing competitors and their offerings, including the pricing. You will also want to point out their strengths and their deficiencies and where you think your offering will be more appealing to the market. Base your statements on primary and secondary research, not foundationless assertions. Don’t business plan “in a vacuum”.

Marketing Strategy/Tactics: What will be your marketing strategies and tactics for selling your products and services to your target market? It is in this section that you will exhibit your market knowledge and insights into the buying habits of the target market. You will discuss the typical buying process/cycle for the products and services you are introducing and you will describe any innovations you expect to bring to this process. For example, does your target market respond best to being sold through the internet, or have they never bought anything in your space unless it was sold by a salesperson face-to-face? A lot of the answers here will of course depend on the complexity and price point of your offering. If you expect to take a very innovative approach to marketing and selling to your target market, your argument will be a lot more compelling if you have done tests and primary market research to prove that the market is open to such an approach. Human behavior is not easy to change, and this is not lost on potential investors.

Management Team: It has been said many times that a potential investor cares more about having a good management team than about having the perfect product or service offering. In fact, it has been said so much, that it is largely taken as a truism by those in the entrepreneurship field. Why would this be? Well, veteran entrepreneurs and investors know that very few successful businesses end up being successful based on the exact formulation on which they were founded. Typically there are many course corrections that need to take place – the business and the offering morph as the founders and their team get more feedback from the marketplace. Given this reality, no one expects a perfect formulation of the business at the outset, but most realize that if the management team is not apt, it will have a very hard time making the ongoing adjustments necessary to become successful. So, in this section, you must describe your management team and why you believe that in this particular marketplace, you think your team is the right one to make your company a success as the business grows and evolves.

Financial Summary: This is the section of the plan that gives non-financial and non-quantitative people the most pause. In fact, in my observation, this is the section that causes many to not even bother starting the business plan. They don’t understand it and they realize that it will not be an easy road to understand it. That said, if you are starting a business, you must have a basic understanding of break-even, profitability, and financial statements if you want to increase your probability of having a successful business. You don’t need to become a “numbers person” or a “quant jock” overnight, but you do need to be willing to step outside your comfort zone a bit, so you can understand how the world keeps score in business, which is by use of financial information. There are programs to help you put the financials together and there are also people out there who will help you put them together quite affordably. However you decide to approach it, make sure that you are not simply handing it off to someone else, without developing at least a basic understanding of the subject matter yourself. It is very difficult to effectively run an enterprise, if you do not at least understand the basics of how to “keep score”.

The essential elements that you’ll want to include in your Financial Summary include the following:

Break-even Analysis: a calculation of the point at which the company covers all its fixed and variable costs. Although it may look and sound daunting, it is a very simple calculation, especially when you’re just “thumbnailing” it. You’d do yourself and the readers of your plan an injustice if you didn’t do this calculation.

Key Assumptions: a description and quantification of those elements about which you don’t have certainty that will play a role in your financial model. Unless you possess supernatural powers to know the unknown and predict the future, you will not be certain about the values of all the variables that will go into your financial projections. For example, you will not know with certainty at what price or rate your offerings will sell in the marketplace, so you’ll need to make estimates or assumptions. You will have many assumptions, with some having a very important impact on your projections and others having a minimal impact. In this section you will want to focus on the important assumptions and describe them in as much detail as practical, to give yourself and the readers of your plan an indication of their variability and their importance in your financial projections.

Projected Financials: here, based on your assumptions, you will project the three major financial statements: the Income Statement, the Balance Sheet, and the Cashflow Statement. The Income Statement provides the reader with a window into the expected revenues, costs and profitability of the company. The Balance Sheet provides a snapshot of the company’s assets, liabilities and equity at a particular point in time. The Cashflow Statement does exactly what its name implies – it provides the reader with a window into the cashflows based on the company’s operating, investing and financing activities. The three financial statements are inextricably linked and you’ll need to project all three to provide a full understanding of the expected financial performance of the venture.

Key Financial Indicators: Based on the projected financial statements, in this section you will provide the reader with financial ratios that can yield insights into the potential financial strengths and weaknesses of the venture. These ratios indicate such things as liquidity, profitability, return on equity and asset utilization, among others, and are important for gaining an understanding of the likely financial attractiveness of the venture.

Capital Requirements: One of the reasons you’re creating a business plan may be to raise money from equity investors or get a loan from a bank. Any potential investor will be very interested in the projected finanical statements you created above. They will also want to see a more specific breakdown of the capital requirements you see for the venture, into the future. The relevant time horizon will vary, but you’ll want to project this for at least five years. These capital requirements can result from several potential factors, but the largest chunks are likely related to expenditures on equipment and facilities, startup costs, including the hiring of key senior and technical staff beyond the founders, and working capital.


So in the end, the business plan is not so complicated. It will however take a significant amount of time and effort to complete to a reasonable standard. Sure, you could take shortcuts and put a lot of guesswork into your plan, but that would serve neither you nor the readers of the plan. Particularly in the area of understanding the needs and behavior of the market, put the time in to do sufficient primary and secondary market research to establish that there is actually going to be demand at a profitable pricepoint for your offering. If there is no demand for what you bring to market, nothing else will matter and you will have wasted a great deal of time, effort and money.

We’d love to hear your comments and question about developing your business plan. Leave a comment below or in the top right hand corner of this post.

Paul Morin
Twitter: @companyfounder.

Apr 032011

If you are starting or already have an early-stage business, you may have come up with an idea and just decided to go for it. While that works for some, I have found that it is always a good idea to get very clear in your head the objectives you have for a business, before you start it, or at the very least, before you try to grow it too much.

There’s probably an infinite number of categories of businesses you could create, particularly if you want to get very specific about the venture’s characteristics. Rather than try to take on the world here, we’re going to focus on five broader categories of businesses that I have found encompass the vast majority of companies out there.

1.) The first category is what I call Hobby Businesses. An example of a business that falls into this category would be one where you collect antique trains, so you decide to go into business buying and selling them. The beauty of a business like this is that typically you won’t lack for passion for the subject matter, as it’s something that you’re already willing to do in your spare time for free. Another positive about this type of business is that no matter how much time and resources you invest, within reason, with deference to your relationship with your family, you can hardly lose. You love the subject matter and would probably be spending money on it anyway. The downside to a business like this is that it’s hard to keep your hobby and love of the merchandise separate from the commercial interests of the enterprise. In the end therefore, while there are exceptions, a business such as this typically remains in the hobby realm and does not develop into a larger, more profitable enterprise.

2.) The second category is Lifestyle Businesses. This is the kind of business that allows you to have flexible hours and maybe even flexible geography, yet pays you well enough to make it worth doing. An example of a lifestyle business would be working as a business coach. There’s no doubt that there are some coaching businesses that are large, have several partners and various administrative staff and are extremely profitable, but on average, these are one- or two-person Lifestyle Businesses. They take advantage of the background and capabilities of the owner and allow that owner to make a good wage with a lot of flexibility; however they are highly unlikely to become fast growth companies with many employees. There is nothing wrong with Lifestyle Businesses, in fact, they can be great! It is important though that you understand their limitations and realize that if you are trying to create a fast growth business, then that is a different animal, with different lifestyle, investment, risk and upside expectations.

3.) The next category is Franchise Businesses. This one does not require too much explanation, since as consumers, we’re all familiar with a large number of very successful food franchises, such as Subway, McDonalds, etc. Franchise Businesses do not appeal to all entrepreneurs, but they do appeal to a good number, particularly those who have come from jobs in corporate America and are accustomed to a structured environment. Franchises can be great businesses, with excellent profitability. Also, on average, given the proven system they usually provide to their franchisees, Franchise Businesses fail at a much lower rate than the overall startup population. On the downside, Franchise Businesses can require a significant initial investment that is outside the reach of many entrepreneurs. They also require ongoing royalty payments to the Franchisor. That said, they can be an excellent alternative for the aspiring entrepreneur who has very little experience in startups and who has some funds available to dedicate to the franchise startup costs.

4.) The fourth category is Self-funded Growth Businesses. These are not hobbies, they are not Lifestyle Businesses and they are not Franchises. Rather, they are businesses that you start with the intention of growing them into large enterprises with many employees and many millions of dollars in revenues. In this category, you are funding the startup costs yourself, from your own assets and available credit. You are not seeking outside investors, most likely because you want to retain control of the business and you do not want to have to answer to equity investors, whether they be friends and family, angel investors, or venture capitalists. Since you typically need significant funds to start a growth business (let’s say $250k plus), this type of business is usually started by someone who is either independently wealthy from other sources, or has started and been successful with other businesses and wants to pursue their next great idea. Just because businesses in this category are self-funded at the outset, does not mean that they will not take growth funding down the road, rather it means that in the startup phase, the company founder(s) do not want the complications of having outside investors. Businesses in this category can fall into a number of industries and business types, depending on the background of the founder(s).

5.) The fifth and final category on this list is Outside-funded Growth Businesses. Such businesses often fall in the technology space, as this is an area of great interest for angel and venture capital investors, two of the most common types of equity investors in early-stage companies. Because they are “Outside-funded” does not mean that none of the founder(s)’ money goes into the business; it just means that a significant portion of the funding comes from outside sources and a good portion of the control of the venture is ceded to those outside investors. For many types of true growth companies, given the startup costs required relative to the net worth of the company founders, there is no choice but to take outside capital [investor pitch template, here]. This is not all negative, of course, as having the participation of the right investors can help the founders accomplish many of the early partnering and customer seeking activities necessary to achieve success. On the other hand, most any entrepreneur who has worked with outside investors will tell you that they would much rather be able to drive the business in the direction they want, without having to answer to outsiders. So taking equity investment from outsiders is a doubled-edged sword, but the reality is that, particularly in the tech space, very few of the great companies that you would know by name were started and grown without the benefit of outside equity capital.

This list of startup business types is not exhaustive, but it gives you an idea of the five broad categories of businesses that you may consider starting. Before you invest the first dime in your business, I strongly suggest that you come to terms with the type of business you are trying to start. If you find that you want to start a business that you simply cannot afford to fund from the resources of the founder(s), you will need to seek outside capital. In that case, there’s a wide variety of funding sources that you can consider. In any case, you will want to make sure you do a good job of screening your ideas to ensure that they truly represent the types of opportunities you want to spend your time, money and other resources pursuing.

I hope you have found this helpful in gaining perspective on the types of ventures you may start up and grow. If you have any questions with regard to how to apply these ideas to your particular venture, don’t hesitate to contact us. In any case, we’d love to hear your thoughts/comments/questions/ideas. Please enter them below or in the top right corner of this post.

Paul Morin

Mar 312011

Raising Capital – 7 Potential Funding Sources and What They Look For

Raising capital for your business?  Here are seven potential sources of capital you should consider.

# 1 Self-Funding

Self-funding is where you either fund from savings or from ongoing cash flow that perhaps you have from another venture.

In terms of what you are looking for as the sole investor in the business, I’d say the most common motivation is control. You do not want to give up equity ownership in your business, so you decide it’s better to risk you own capital, or to take on debt, than have other equity players in the business. This is typically the approach taken when the amount of capital required is not too large (relative to your resources) and you have a relatively high confidence level in the success of the venture.

# 2 Friends and Family

This is where your friends and family hear that you’re getting a new venture off the ground and want to get in on the action. It could also be the case that you go to them with your idea and convince them that it would be a good idea to invest.

While this is one of the most common sources of funding, it is also one of the riskiest. This is the case because you are risking more than just a business relationship; you are also risking a personal relationship. It is very important that you are completely up-front with prospective family and friend investors. You owe it to them to tell them that, while you will do everything in your power to make the venture successful, they could very easily lose all the money they’ve put in. It is also important that you have a clear, written agreement with these investors, as you would with any other investor, regarding the terms of the investment. You need to cover whether it is a debt or equity investment and the exact investment terms and conditions. There are several potential “gotchas” with these investments, from a tax and other regulatory perspective, so make sure you have competent legal counsel.

# 3 Credit Cards

This approach involves using whatever credit limit you may have on credit cards to fund your start-up and early stages of your business. This is a much more common source of capital than most realize or would be willing to admit.

The “investor” in this case is still you, as you have full responsibility for repayment of whatever credit limit you may utilize for funding.  This is the case even if you open business credit cards in the name of the business because many creditors will require a personal guarantee from the owner or company officer.  The credit card company typically will charge a higher interest rate than most other (credit, at least) funding sources. The credit card company is not looking for any equity ownership in your business, rather they just want the amount they lent you paid back with interest. This source of capital needs to be used responsibly and not on frivolous purchases. Remember that even if your business is not successful, you will need to pay back these debts, or risk ruining your credit record.

# 4 Home Equity Credit Line

This source of funding involves taking a loan, in the form of a credit line, against the equity you have in your home. This was very common at one time; it is less common in times when homeowners don’t have a lot of equity in their homes.

In this case, your home is the security for the loan you are using to buy, start, or grow your business. It starts to get a bit more serious here, as your home is the security and is directly at risk. That said, this is a very common source of capital for entrepreneurs. Again, as with the other forms of personal funding of your business, you’ll want to be very careful to make sure that you are making expenditures that will create and/or increase future earnings, not making frivolous purchases.

# 5 SBA Loan

This is a bank loan that is guaranteed by the SBA. The SBA’s guarantee of all or a portion of the loan makes it possible for the bank to lend to borrowers to whom they may not otherwise lend, or at least not with interest rates at such low levels.

This is a very common source of funding for early stage companies. In reality though, from the perspective of the entrepreneur, it is not all that different than other forms of asset-based lending. The entrepreneur still has to have a very good credit record and has to have sufficient assets to secure the loan. Do not think that by getting an SBA loan, you will not be on the hook if the business fails; you will. The main advantages for entrepreneurs of SBA loans are that they may get approved for certain projects or loan amounts that they may not otherwise, without the backing of the SBA. Also, it is likely that on an SBA loan you will have an appreciably lower interest rate than you would on a non-SBA-backed loan.

# 6 Angel Investors

This type of funding occurs when through your contacts or those you make, you manage to get in front of a group (or one) of wealthy individuals that invest in early-stage companies. Such investors are typically called “angels” or “angel investors”.

Angels tend to be relatively selective about the types of ventures they invest in. That said, there is a very wide range of sophistication among angel investors, along with which the level of selectivity varies widely. You will want to make sure you have concise investor pitch that flows. You will want to make sure that all angel investors from whom you will receive funding meet the Accredited Investor standards. For this reason, and in order to make sure the terms and conditions of the investment make sense, again you will want to make sure that you have competent legal counsel involved. Don’t even consider doing a deal with angel investors without having a good attorney watching out for your interests. Also, although in the beginning of your venture it may be tempting to take money from whoever will give it to you, do your due diligence on all prospective investors and make sure they are people you think you can work with and communicate with. This will be particularly important when all does not go exactly as planned. As you know, it hardly ever does.

# 7 Venture Capital

In order to obtain venture capital funding, you present your business plan or growth plan to professional early stage investors known as venture capitalists. This source of investment is appropriate for a relatively narrow segment of the startup company population and very few companies end up being funding by venture capital.

It is important to remember that venture capitalists are professional investors.  It is key to know what venture capital investors look for.  They raise money from what are known as limited partners, usually pension funds and other institutional money managers, then invest that money to earn as much return as possible for their investors. The venture capitalist then shares in the gains they are able to achieve. They are also paid a management fee for their efforts during the life of the fund, which is typically 7-10 years. So as you can see, venture funds are designed to invest, grow and harvest in a finite, relatively short period of time, thus they must choose their investments very carefully. For this reason, venture capitalists are typically interested in companies that are further along, that are already on a reasonable growth trajectory and need money for expansion and further growth. They usually like technology companies that have a proprietary (patented or patentable) product or business process. Unless you have something truly exceptional in the techology space that’s a bit further along, other than with a few venture capitalists that are willing to look at seed deals and deals outside the technology space, you are not likely to find success seeking funding from these investors.


While this list of seven potential funding sources for startup and early-stage companies is by no means exhaustive, it gives you an idea of several of the most common funding sources and what they’re looking for in their investment targets.

Let us know your thoughts, comments and questions, which you can enter below or in the top right corner of this post.

All the best as you work to start and grow your venture!

Paul Morin