Here is a video that explains precisely why raising capital is so important to your business.
And, importantly, it includes details regarding why it’s critical that you understand how to raise capital from multiple sources, even if you currently are only seeking one particular type of capital...
Near the end, I reveal a fantastic (and perhaps my favorite) tip, which is the single most controllable factor that you have to improve your success in both fundraising and successfully growing you business.
Some of the most interesting investment research over the last 6 months has been the application of traditional portfolio theory and hedging techniques to angel and private equity investing. Research compiled by the National Venture Capital Association, by the Kaufman Foundation for Entrepreneurial Activity, and by the Entrepreneurship in the United States Assessment, highlight a number of both subtle and startling insights.
When compared to other asset classes, there is relatively little correlation
between various private equity investing sectors. In other words, while the
prices of publicly traded aerospace and software companies, for example, will
move up and down more or less together, the success
probabilities of that hot drug development company and that wind energy startup
are reasonably uncorrelated.
Why is this important? Because it creates a far greater hedging opportunity than is available in public stocks, whereby the investment combination of the wind startup and the drug development company has disproportionately less risk for the expected return.
The research also shows that the smaller the size of an equity financing deal,
the less correlated is the success probability of that deal with the equity
markets as a whole. A subtle, but critical point that had made a HUGE difference in
investment returns over the past 10 years. Try on these two facts:
1) The venture capital industry as a whole - with average financing sizes over the past 10 years of greater than $8 million/deal - has returned ZERO percent to investors during that time frame.
2) In contrast, the average return on private equity classified as "early, or angel stage" had an average annual return during that same period of a whopping 32.9%! (Thomson/Reuters).
I talk about more about the application of portfolio theory to private equity and angel investing in the video below:
The next time you get frustrated that the taxes you pay to the U.S. government are so high, realize that the government gives a lot of this money back to entrepreneurs. And one of these entrepreneurs can be you!
In fact, last year, the U.S. government provided funding to 69,434 companies through its Small Business Administration (SBA) lending program. And last month, the SBA stepped up its efforts even further to help entrepreneurs and small business owners.
Specifically, last month, the SBA created a new type of loan called the "America's Recovery Capital" loan, or "ARC." This loan is specifically designed to help existing businesses who are currently experiencing distress due to the economy.
What's great about ARC loans is that they are deferred loans. The funds are dispersed to you over a period of up to 6 months, but you are not required to make any payments until 12 months have elapsed since you were funded. Payback terms are up to five years.
The maximum loan principal is $35,000. And there are no fees to the borrower. And the government guarantees 100% of the loan to the SBA partner bank. Finally, the interest rates are extremely reasonably; only prime plus 2%.
To learn more about and how to get an ARC, SBA or other bank loan to fund your existing or startup business, instantly download our new report entitled "Growthink's Step-by-Step Guide to Raising Capital from Banks & SBA Lenders" here: http://www.growthink.com/products/loanguide
If you own an existing business, or are planning to start one, there is one organization who really wants you to succeed.
In fact, this organization is even willing to loan you money to start or expand your business. And they will give you this money with favorable interest rates and payback terms.
That organization is the United States government.
The U.S. government has learned over time that giving capital to entrepreneurs creates more jobs, improves the economy, and expands the tax base. All the things they really want to achieve.
Many years ago the U.S. government set up the Small Business Administration (SBA) specifically to make loans to entrepreneurs and small business owners. In fact, the SBA currently has $45 billion in loans outstanding to entrepreneurs.
And, in addition to SBA loans, there are several kinds of debt capital that may be available to start or grow your business such as business lines of credit and traditional bank loans.
Each of these types of capital are covered in detail, including a step by step plan for getting these loans for your business, in our new report entitled "Growthink's Step-by-Step Guide to Raising Capital from Banks & SBA Lenders."
Among other things, the report covers:
* The differences between raising debt capital and equity capital that you need to understand (Page 2)
* The important elements of loans and what you need to know BEFORE you look for one (Page 7)
* Exactly what lenders are looking for when they consider whether or not to fund your business (Page 9)
* The biggest misconception about loans that keeps many entrepreneurs from getting funded (Page 11)
* One easy, but seldom used trick to maximize your chances of getting a loan on the best possible terms (Page 12)
* The key types of loans and what you need to know to make sure you get one that's right for your business (Page 13)
* The best way for startups to overcome a key SBA requirement and quickly get the perfect SBA loan (Page 19)
* Assessment of every type of SBA loan to allow you to quickly determine the optimum one for your business (Pages 19 to 24)
* The hands-down fastest way to get an SBA loan (Page 29)
* Growthink's proven 6-step formula for getting an SBA or bank loan (Pages 32 to 36)
* The 30 U.S. banks that are most likely to loan money to your business (Page 37)
To learn more, click here.