Entrepreneurs sometimes assume that financing can only be obtained from traditional lenders. However, they are not the only resources available for certain projects. Business Financing Network (BFN) has contacts with venture capital organizations and individual "angel" investors who can provide the needed financing that more traditional sources will not handle.

BFN is not a venture capital company, and we do not become involved in the actual financial discussions between entrepreneurs and those entities. However, our years of experience in the financial industry provides us with knowledge of, and contacts with, venture capitalists. When appropriate, we introduce our clients to them.

Venture capital funding receives much media coverage. Entrepreneurs often assume that venture capital organizations naturally will be quite eager to finance their "great new ideas." However, there are many considerations that quite often preclude venture capital organizations as potential financing resources for average projects.

Venture capitalists are extremely selective about the types of projects and companies they will consider. A rule of thumb is that they fund, at best, one out of ten proposals brought to them. They typically are interested in only a few specific industries, which stage of growth the company is in, and where the business is located. They also want to see s strong management team with direct industry experience.

Venture capitalists expect exceptional returns on their investments. They normally only consider projects requiring substantial amounts of financing--typically over five million dollars. They also usually require a substantial amount of equity ownership in the business, and they want to see clear exit strategies.

As can be readily seen, venture capital funds are not the answer for every project. However, if your project meets the criteria and you understand the probable conditions, BFN may introduce you to such potential funding sources.

"Angels"

Individual "angel" investors are somewhat similar to venture capitalists, but they do have major differences. Generally speaking, such investors are much more flexible, willing to look at smaller projects, and will be interested in a broader range of industries.

The so-called angels typically are wealthy individuals or professionals looking for alternative investments. Quite often they have been very successful in other business endeavors, and they may want to become active participants in the company seeking capital. Their skills and expertise can be exceptionally valuable to new entrepreneurs.

There are a few quasi-organized networks of such investors, but quite typically they are simply individuals looking for interesting and potentially good investments. While they will scrutinize all deals very closely, they are likely to be more flexible than structured venture capital funds.

BFN does not represent clients to angel investors, nor do we attempt to sell your project to them. However, we are permitted to introduce clients to any investors who might be interested in your type of project. Just give us a call, or send us more information by clicking here, and we will discuss all the possibilities with you.

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