Module 4 – Funding and Raising Money

As we identified in lesson 1-4, the issue of raising money is one of the most important and intrinsic parts of entrepreneurship. In this module we tackle the role that money plays in starting a new business. Our philosophy is very simple, that raising money to start a new business is a bad idea. So, we introduce the idea of bootstrapping and show you how to start a business with little or no money.

Correct Capital Structures

Even though we believe firmly in bootstrapping, we will gladly acknowledge that businesses may at sometime need infusions of cash to grow. In this first lesson on fund raising, we discuss how to structure your company, from the very beginning, in such a way as to facilitate angel and venture capital investments.
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The Benefits of Bootstrapping

Bootstrapping is the process of starting a business with little or no cash. We discuss the many benefits of bootstrapping and show you how it will affect you, your employees, and the future. Bootstrapping may cause you to grow the business more slowly, but we will show you how this can be very beneficial for you and your new business.
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Banks and Banking

One of the first things you must do when establishing a new business is to create a banking relationship. We have advice on what type of bank to select, and how to deal with the bank and all aspects of your entrepreneurial story. Loans are also discussed, in particular the availability of bank money and the possibility of actually achieving this type of funding.
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How to Get a SBA Loan

One of the United States government programs that is most helpful to entrepreneurs is the Small Business Administration. They offer loans, known as SBA loans, which are an effective tool for entrepreneurs to raise capital when it is absolutely necessary. However, this can take longer than it might be worth as the entrepreneur may spend valuable time focusing on fundraising and not growing their business.
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Angels and How to Find Them

In this step, we begin our fund raising odyssey. Angels are traditionally the first source the entrepreneur will ask for funds. Angels are rich individuals that are interested in investing in startup firms, and usually offer some small amount of business advice. We will discuss how to find Angels, what to say to them, and how to close the deal.
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How to Raise Venture Capital

The next step in the fundraising process, and the part focused on in the media, are the venture capitalist. Some venture capitalists are famous for providing the startup funds for companies like Apple, Hewlett-Packard, eBay, and Amazon. We explain how to find the appropriate venture capitalist, have to approach them, what you should expect to give up for their capital, and review the entire VC experience.
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