Raising Startup Capital From Investors - Information Resources

Starting a business requires money, often a lot of it.  Unless you have the resources yourself or can convince Grandma to give you a generous gift, you will be looking for outside sources of capital. 

You have the option of borrowing money or selling part of your business to investors.  If you decide to go after investors, you must know that the sale of business interests ("securities" in legal lingo) is heavily regulated by federal and state laws and can get you into serious legal trouble if not done correctly.

For an excellent introduction to the laws regulating the sale of securities by small businesses, I recommend this online guide by the Securities and Exchange Commission:
Q&A:  Small Business and the SEC-A guide to help you understand how to raise capital and comply with the federal securities laws.

Since venture capital is out of the question for many small businesses, the first line of investors are often friends, family or wealthy individuals (business angels).  For a very easy to read introduction into the world of raising money, I recommend the book (hardcover or e-book available), Investors in your Backyard:  How to raise money from the people you know by Asheesh Advani.  You could also read one of Asheesh's many articles on the topic on entrepreneur.com.

Finally, once you get more familiar with the subject of raising startup capital, the process involved and the legal documents necessary, you or your lawyer may want to consult model venture capital financing documentation developed by the National Venture Capital Association.  These documents come complete with explanations and are developed by leading venture capital attorneys in the country.  As I mentioned, venture capital may not be in the future for many small businesses; however, the terms and structures found in these documents are often repeated in smaller transactions.

Comments

[Wanda]

If the two technolgies exist primarily to kill each other, we never got the memo

[BRIANAGoodman]

If you are in a not good position and have got no money to go out from that point, you would require to take the mortgage loans. Because it should help you emphatically. I get auto loan every single year and feel OK because of this.

[Gregory D. McAdory]

I am seeking funding for cartoon series and, products.