A Guide to Funding
Funding & Investors is an excellent online publication that covers the venture capital, private equity, and IPOs markets. Authors Michael Cohen and Amy Crews provide regular articles on funding issues and trends. They describe several common funding schemes and offer case studies. Their focus is on the aspect of private investors and venture capitalists for handling start-up companies, and more specifically, they focus on how to raise money for early stage businesses.
The start-up costs of companies that fail can exceed their financial potential. As a result, venture capitalists normally finance most of their business ventures using personal savings, investment funds, and/or personal credit lines. These sources limit the access of new start-ups to capital. Funding is usually arranged through banks or other lending institutions. Private investors typically fund early stage companies in the form of line of credit, debentures, convertible senior notes, or warrant stock.
Funding & Investors focuses on providing simple explanations of the various forms of capital available and the risks associated with each. It never promotes or encourages speculative investing. This information is designed to be useful to the reader who has not had the experience of raising capital. Investors seeking venture capital should consider this information based on their individual investor profile. The information is not intended to replace the advice of a financial professional.
As with other similar publications, Investors & Investors is written to be an introductory guide to funding. While it is important for new investors to understand financing as they move forward, the editors have made it clear that this information is not intended to replace that level of expertise. For those who are already familiar with venture capital and other financing options, this publication can serve as an effective resource. Its focus is on those entrepreneurs and business executives who are making a significant profit from their own investments and whose ability to raise capital continues to give them an advantage.
Part one of Funding & Investors focuses on the basics of venture capital, including definitions of the terms, and the types of arrangements under which capital is raised. Part two will introduce you to angel investors, as well as what these investors do, how they are selected, and what their role is in the financing of a company. Part three will focus on why private loans and securities loans are not always the best financing options for companies, and what investors are looking for. The fourth section will offer a brief discussion of why corporate finance is an important part of venture capital and what types of lenders work with small businesses. Funding & Investors also has a number of industry experts who have contributed articles to the book, to help entrepreneurs through the process. They provide a valuable insight into the type of questions that need to be asked when raising funding.
Although much of the information in this publication is designed to be informative, you should not rely on this information to make your funding decisions. Past performance is not necessarily indicative of future results. Neither is current performance necessarily an indication of results. In particular, you should not base any decision about funding on trends that may be present over a five year period. Such a period would likely be too short to give you meaningful data.