Raising Capital for Your Start-Up Business
by Micheal N. Brette, J.D.
(NewsUSA) - Small business is the driving force behind the U.S. economy. And now that we are in recession status, small businesses are needed more than ever to help us climb back out.
According to data from the U.S. Small Business Administration, the number of employer firms topped 6 million for the first time in 2006, reaching 6.02 million. Small firms, or those with fewer than 500 employees, represent 99.7 percent of all the nation's employer businesses, and account for 50 percent of the non-farm private-sector employment. More small businesses will be needed to make the process quicker, but finding capital for a start-up business can be a challenge.
Though difficult, it's not impossible for wily entrepreneurs to find seed capital to start their businesses. "You can still raise capital in this market," says Micheal N. Brette, J.D., president and CEO of VentureNet Capital Group, Inc., a public venture capital company investing in pre-public and emerging growth companies. "You just need the assistance of a professional financial consultant to assist in the preparation of your private placement offering documents and make introductions to investors qualified to make an investment."
Hiring professional financial consultants can help entrepreneurs find investors and devise strategies to find seed capital. They will even help their clients file the correct paperwork. For example, any new business will need to prepare private placement offering documents, subscription agreements and investor suitability questionnaires. Business owners need to know how to structure their offering, whether it be debt, convertible debt, equity or participating preferred. Consultants will also help business owners file Form D with the SEC 15 days after accepting their first investor check and comply with all state security laws.
Professional consultants can also help entrepreneurs target the investors most likely to support their specific type of business. "You need to be introduced to the correct investors who are interested and qualified for your type of offering," says Brette. "This takes expertise and connection that most business owners lack. That is why 90 percent of private deals never raise any capital outside of their friends and family, and go out of business."
For more information, visit www.mbcapital.net.