Overview of Start Up Captial

As an entrepreneur you must learn how to find access to the tools needed for efficient production. Maybe you obtain venture capital that gives you the money you need: Fact: the majority of entrepreneurs will raise more money for their idea by panhandling on the street or playing the lottery than they will from the Venture Capitalist community. Only one percent of all deals that the venture capitalists AGREE to look at get funded. Virtually all proposals never get looked at. Only the special few that have multi-million dollar markets and a proprietary concept will be evaluated. Angel investors may look beyond the need for a huge market and a proprietary product but it will still take a first rate business plan and your ability to demonstrate that you can execute that plan to convince the angel investor to part with her/his money.

Most entrepreneurs wind up bootstrapping the costs of the start-up firm. This means that they start small with money from their own savings and help from "Friends, Family and Fools". As sales begin, the entrepreneur reinvests almost everything they earn back into the business. Now the problems begin. Sales are escalating and you need more people, materials, inventory and the ability to carry the sales until you get paid. Have you planned for this? Where will the needed money come from? Credit cards may have capitalized your firm initially but they are maxed out. Without a source of money you cannot operate for long. Many enterprises without a cash management plan have closed for being too successful. So, to ensure that you have adequate capital take the time to anticipate the cash needs of the firm based on differing assumptions about how sales will grow.

Go to Capital Types to learn more about the types of start up capital available and how to avoid common pitfalls that often cost entrepreneurs their business and sometimes more.

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