Investing in startups is a risky business. The failure rate of venture capital companies is between 20% and 90%. However, the risks associated with venture capital firms are often off-set by the successful few investments that drive profits. In this article, we explore these ideas.
Funding Your Business
There are many different avenues you can take when trying to obtain funding for your business, whether you’re just starting out or looking for capital to help you expand and grow. Bright Hub’s Entrepreneurship Channel has an entire subdivision dedicated to exploring these different funding opportunities to help you decide which ones are best for your business and your personal management style.
To new business owners, there may seem to be an air of mysticism around the concept of venture capitalism. Our experts in the field will help to dispel some of the fears and misconceptions people have about this type of funding and offer advice to those who would like to seek it for their business. If venture capital isn’t for you – and it’s not, for many – there are a number of other methods of obtaining funding for your business.
If you’re thinking about using personal funds, be careful. It’s very easy for personal and business finances to become so intermingled that a business failure could cause personal ruin. For instance, if you’re thinking about mortgaging your home to raise business startup capital, make sure you’re aware of all the pros and cons first.
For other funding ideas and advice, check out the other tips offered by our experienced writers. Learn more about the impact of different funding methods, and discover if your business venture qualifies for certain grants and government loans. Most of all, make sure you know what you’re getting into before you sign your name on that dotted line!
One advantage an LLC has over an S corp is a lessened paperwork burden. But, this is far from the only potential advantage. Entrepreneurs may want to consider choosing an LLC over an S corp structure; this allows enjoyment of benefits such as asset protection without a lot of red tape.
Attracting angel investors is a challenging undertaking. The importance of a sound business plan has been well documented, but the value of the accompanying cover letter can not be over estimated. Learn the important elements to include in the cover letter that will appeal to the potential investor.