As I’ve said so many times already this year, this is the year of the phenomenal career, the year that we all commit to career empowerment and improvement. But this year isn’t just about getting the most out of your job; it’s about getting the most out of your new business.
Commitment #2 of the Declaration of Career Empowerment states: ” I will find or create a career that enables me to do what I do best every day.”
Here I’ve highlighted “create” to emphasize the fact that you don’t have to wait for your employer to create or offer you a job that you’ll love; you can create your own job, nay, your own business that creates jobs. This is the year to do it.
If you have been percolating a new business idea or moonlighting at your old one, 2008 is your year to, in the words of Commitment #3, “fearlessly pursue career opportunities that excite [you]“.
To help you do that I’ve compiled a few seed money resources, sources of startup capital and support to get your new venture off the ground.
VENTURE FUNDING
Venture funding is the work of venture capitalists. They give you their money in exchange for equity in your company and, hopefully, a big return once you make it big (preferably within 1-3 years). There are thousands of venture capitalists, but many do not provide seed funding, the money you need to cover expenses or build prototypes in the very earliest stages of your new venture. Venture capitalists consider seed funding very, very risky and not likely to deliver great returns. For this reason, the few venture capitalists that do offer seed funding, usually offer lower investments (no $5 million infusions).
But, if you need a little cash to get or keep you going in the early stages, and you don’t want to give away a big chunk of your company too soon or at all, venture (seed) funding may be right for you. To learn more about seed funding, check out the organizations listed below.
- Ashoka Venture Fund: Ashoka Venture Fund provides investments of varying amounts to Ashoka Fellows, entrepreneurs who are starting a social business enterprise (a business that will address or resolve a social ill like poverty or illiteracy while also generating revenue). Ashoka Fellows receive a three-year stipend, lifetime professional support and access to a 2,000-person peer network. Ashoka also assists entrepreneurs in spreading their ideas. Get more information on Ashoka Fellowships.
- Bay Partners AppFactory: AppFactory provides early stage funding to developers of applications for the Facebook platform (the free opensource API that allows users to freely build “widgets” to be shared by millions). AppFactory offers $25,000-$250,000 investments and a fast-track approval process. Apply for fast-track funding.
- Google Gadget Ventures: Google Gadget Ventures provides $5000 grants to application developers who’ve developed a gadget currently listed in the Google Gadgets directory to help them further develop their applications. Google Gadget Ventures also offers $100,000 seed investments to developers who’d like to build a business around the Google gadgets platform. Only Google Gadget Venture grant recipients are eligible for this type of funding. Apply.
- YCombinator: YCombinator provides seed funding in the form of some combination of money and other assistance. Typically, YCombinator invests no more than $20,000 in exchange for a 2%-10% equity stake in your company. Apply for funding from YCombinator.
- Springboard Enterprises: Springboard Enterprises is a “venture-catalyst” for women entrepreneurs starting high-growth businesses. Springboard provides women access to top venture capitalists and hosts venture forums during which selected entrepreneurs present their businesses to potential investors.
Seed funding is also available from many colleges and universities, and from state governments in the form of grants. The one drawback to venture seed funding is that it is often not available to low-tech businesses.
INCUBATORS
- Business incubators provide new businesses with low-cost office space, administrative support, expert advice and, in some cases, seed capital in exchange for equity. Many colleges and universities, especially those with business schools, operate business incubators. These incubators are not limited to students; they are usually devoted to local area small business owners who want the benefit of the university’s support, the advice of business school professors and access to talented students. Most states also fund incubators as a way to stimulate economic development. The National Business Incubator Association can provide more information on the benefits of business incubators.
GOVERNMENT FUNDING
It’s not easy to get government funding, especially these days when there continue to be cuts and restrictions on Small Business Administration (SBA) funding. The SBA is also backlogged due to its efforts to support entrepreneurs whose businesses were damaged by Hurricane Katrina and the California wildfires. That said, the SBA is the go-to agency for small business startup funding
- SBA: The SBA is still a viable funding opportunity for many entrepreneurs. The SBA provides equity capital through Small Business Investment Companies (SBICs), grants (via other government agencies) and loans, as well as contract opportunities. The SBA’s Business Matchmaking events bring together small business owners and decision-makers from government agencies to give small business owners the opportunity to do business with the government. Most funding will come in the form of loans or contracts, and you’ll need to have a viable business, a business plan and good credit.
- National Institute of Health (NIH): The National Institute of Health, a division of the Department of Health and Human Services, provides funding to small businesses involved in research and development, manufacturing and technology. Apply for NIH grants and other funding.
MICROLENDING
Microlending is predominantly available to entrepreneurs and small business owners in developing countries, but there are some lenders who currently make micro-loans available to U.S.-based small businesses. Micro-loans range from $25-$25,000. Some are interest-free; others offer low interest rates. The goal of microlending is to help people rise from poverty through entrepreneurship and job creation. Most microlenders require less credit history and are more forgiving of poor credit history than traditional lenders.
- Accion USA: Accion provides micro-loans from $500-$25,000 to entrepreneurs to start a business or to finance the growth of an existing business. Accion offers interest rates of up to 13%. Accion also provides its clients business and financial education. Apply for a micro-loan from Accion.
FRIENDS, FAMILY & YOU
- You are your best and biggest investor. You have to invest in the idea first and most. Venture capitalists, angels and other lenders want to know that you have skin in the game before they give you money. If you don’t have a healthy savings account or other assets that you can invest, your current job is your best option. Moonlight until you can go solo. Don’t tap your retirement accounts and slack up on credit cards for now.
I’m generally the last person to suggest that people borrow money from friends or family, not because I don’t believe it’s possible, but because it’s often a challenging proposition. And, more often than not, the little money you get is not worth the big headache. But, there are ways to make the friends and family option bearable for all.
- Virgin Money: Virgin Money is a great option if you want to borrow money from family and friends, but maintain a little professional distance between you. You pop the question and Virgin Money creates the legal documents, handles the transfer of payments and even provides year-end reporting. This gives everyone involved the feel of a “real” business transaction, which goes a long way toward minimizing hard feelings (Paying them back on time helps even more).
Stuff You Might Also Like
If you liked my post, feel free to subscribe to my rss feeds
Loading ...
