Smart Ideas
3 tips for finding capital in a tough market
It's rough out there, but money is available if you understand what capital sources are seeking
By Dustin S. Klein
Smart Business Cleveland | January 2002
Nobody ever said raising capital was easy. And, during a period ravaged by bad investments, overvalued companies and faltering confidence in the national economy, it's even tougher.
So what can you do to ensure the best chance possible of finding cash for a new venture or business expansion? Make sure your funding proposal includes the following:
High growth rate With today's economic conditions, venture capital groups look for projected annual sales growth of 25 percent or more if your company is either launching a new product line or expanding into a new marketplace.
Clear strategy for commercialization Just because your business currently is successful with its sales and marketing approach doesn't mean you can simply duplicate the formula. However, if your market research backs up the contention that you can, show it. If not, develop a strong strategic plan.
Barriers to entry Be sure to show potential capital sources that your company can discourage competition in the new market you're entering. It can be as simple as being several years ahead of any competitors or as complicated as a trade secret, patented product or proprietary process.
