Wednesday, October 21, 2009

To Get Funding, Get Creative

A lot of entrepreneurs who approach me to do a business plan for them think that it will be easy to raise funds because they have the best idea since the personal computer. But last week the Wall Street Journal ran an article on how very hard it is for entrepreneurs to raise money. According to the article entrepreneurs are turning to boot camps and contests. Sean Conway, owner of Notehall.com, wound up with $500,000 in funding by participating in a summer-long boot camp in Philadelphia called DreamIt Ventures. Of course, to win a contest or get accepted into a program, you need a solid plan and presentation. I recently helped an entrepreneur with his application for a grant to seed new businesses in Brooklyn.


The article went on to say that venture capital funding has been declining since 2007 and is now at about the same level as the mid-1990s. That doesn't mean entrepreneurs aren't trying. Entrepreneurial activity is usually high during downturns. The point of the article is that VCs aren't the only source of funding. And if VCs do fund you, you will have to give away a large equity stake.

So think a bit differently. As always, friends and families can become your first backers. But contests are worth entering. For example, you can compete at NineSigma.com and InoCentive.ocm - both sites that reward inventors for solving challenges. Read more at the Wall Street Journal -

http://online.wsj.com/article/SB10001424052748703790404574471433151548294.html
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