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Getting The Money

Getting money is pretty simple in concept.

1. You begin by having a great idea or a great business that needs cash.
2. You find someone with cash who agrees that it's a great opportunity.
3. You get them to agree that you are the ideal person to make this a success.
4. They give you the money.
5. You put it to work.
6. Later, you arrange for them to get their money back plus a profit that makes them happy with the deal.

Seems pretty simple on the surface, doesn't it?

Here at VentureConsult, the company that publishes ABCs For Small Business, we help people find money for their businesses. It's a job we take seriously.

Lately, we've become somewhat irritated with potential clients who have already asked everyone and their dog to invest in their business. When everyone has turned them down, they come to us.

We're good, but we can't restore the virginity of an over-shopped project. We can polish it up and make it look good, but we can't take our client back to before his/her best prospects saw it and passed.

The best way to raise money is to get it from people you know. Next best is to get it from people you can get to know. Anyone you know may know your perfect investor. The trick is to find out who they know. Don't pester them. Just find out what their friend/family member does and file it away for later. You may be able to make the perfect connection because your next door neighbor went to school with the local bank manager.

Don't show a half-baked idea to anyone outside of your usual circle of confidants. Mom and Dad may be pleased to listen and give you feedback before later writing a check. Before you ask your rich brother-in-law, the one you see only at Thanksgiving and on the Fourth of July, to write you a check for $100 K, make sure that you've got the basics covered.

What are the basics?

• Demonstrate that there is a problem.
• Determine that enough people will pay money to get that problem fixed so that you can make a good profit.
• Establish that you can do a good job of solving that problem.
• Explain how you can run the business that solves the problem, hire someone else to run the business, or successfully license the solution.
• Prove to your investors that they'll get their money back, plus a profit.
• Prepare a timetable illustrating when they will get their money back, plus that profit!
• Give them enough information to make an informed decision.

Treat your potential investors seriously. Wear nice clothes. Get a haircut. Take a shower. Shine your shoes.

Do not ask everyone you can contact to make an investment! Some people don't have the money and others aren't interested at all in what you are doing. Know what you are asking them to do, whether it is making an investment, making an introduction or joining the company. Make sure that they have the ability to say "yes" before you approach them. Make sure that you can legally take their money if they offer it to you. You want to be able to take that check and put it in the bank without telling them they have to wait until you get your clearances. They might find something different to do with that money while they are waiting for you to get the paperwork done.

Do not run afoul of the rules. If you haven't gotten clearances, you may find yourself having to give the money back at the most inconvenient times. No matter how much your attorney likes you, he or she doesn't want the business of keeping you out of court after you've made a securities mistake.

We wish you good luck with your money hunt. And, if you want to make sure you're getting off on the right foot, well, we're only a phone call away!

-Cindy Nemeth-Johannes