I’ll assume that whenever you write “venture capital” everything you really mean can be an investor — a person who will write a check in trade for a share in your business. For the record, capital raising refers to a couple of hundred very specialized professional firms that raise vast sums and, in several cases, vast amounts of dollars from companies, organizations and intensely wealthy individuals, and invest that in chunks of several million dollars in high-profile startups. You can forget capital raising. They probably aren’t thinking about what you’re doing.
So, if you are looking for an investor, some tips about what you need to consider: Just how much of an ownership stake would you anticipate to claim in the event that you wrote a check to a company for this to get the mold, build the inventory and kick-start the marketing? You’d probably want to possess a big little bit of that company, right? You’d better anticipate to hand out a big chunk of the business – 50 percent or even more — in trade for serious money.
Maybe you ought to be searching for a more novel way to find money, like from somebody who knows you as well as your product and believes in you, and will be ready to loan you the amount of money in exchange for an increased than normal interest and payback guarantees. That way, if the business computes and you sell it, see your face doubles their money before you take any.
Another option is always to provide a permanent royalty percentage. In any case, you won’t hand out ownership and won’t need to have somebody forever.
Another question is: Where do you find such a person? Head to your local SMALL COMPANY Development Center (SBDC) first, then check in with Service Corps of Retired Executives (SCORE) to find those people who are involved in entrepreneurship and will help you evaluate the options. It will not be easy. If you don’t have an excellent product that undoubtedly demonstrates its value, and you have a believable background and business history, it will likely be a difficult sell.
There are other alternatives to seeking investment. The very best is always to land a contract with a company that’s ordering your product in volume to place into distribution and can advance you enough money to achieve the mold and the inventory. Or simply you could partner with an identical business that already has distribution channels.
Also, don’t discount seeking a U.S. SMALL COMPANY Administration (SBA) loan, if you are prepared to risk your own assets. Head to your preferred local bank, since it will probably handle SBA loans. If it generally does not it should be in a position to tell you which does. The SBA will guarantee a considerable part of the loan to lessen risk for the lender. But you still need to take on the main money yourself, which means you end up risking your own assets.
Without a doubt, I believe the very best financing is sales. Finding investors for a project such as this is incredibly unlikely and, in the event that you do, you’d better anticipate to live with the investor for an extended, long time. I am hoping you sell a few beforehand, use that to get the thing you need, build some, sell some, then build even more, and end up owning everything yourself and owing nothing.
Related: Where to find the Right Investor Related: From Friending to Funding