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Capital Funding

You can find capital funding for a small business or startup company on The Invstor.com Network. Before you begin your search for capital funding, though, let's take some time to discuss what capital funding means to a startup business and what to keep in mind when you're searching.

How to Find Capital Funding

Alright, if you don't want to take any of our advice below, you can jump right ahead to the Invstor.com and start searching for capital funding right now. We won't stop you.

However, if you wait just a few minutes we can give you some helpful advice on your search for business capital.

Help when finding Funding

We certainly want to see you find your funding for your small business, but let's discuss how we can approach this problem effectively. First off, funding typically comes in a few flavors:

Equity Funding - This is the type of funding where you are exchanging equity in your business for the funding your require. This is very commonplace in a startup company. You will typically give up a percentage of your company (hopefully not much!) so that your investors can own a peice of the action when your company grows like crazy. Although this may seem like something that's "free" to give away, you will find out later on if your copmany is successful that this is a very expensive piece of collateral to use.

Debt Funding - Debt funding is similar to the way you use a credit card today. Your credit card provider gives you a specific line of credit in exchange for a debt that is owed (plus interest, of course!). The challenge in debt financing is that it usually must be backed up with some sort of hard collateral (like your house, car, or first born child). Most often this type of funding comes in the form of credit cards and home lines of credit.

The Best Bet for Funding

Start with Debt Funding and extend it as far as you can comfortably go before moving into equity funding. Equity funding is difficult to get because it involves so much risk on the part of the investor. Aside from this fact, investors will often want to see some debt funding being inserted into the business before they put their own capital to work. This demonstrates that the entrepreneur believes strongly in the business by puting their own neck on the line.

If you are already past the point of extending your debt funding as far as you can go, then it's time to look into equity funding. When you do look for equity funding, be sure that you can prove to your investors that the equity you are giving up has some tangible future value. Your ability to demonstrate this value will be directly tied to your ability to raise that equity funding in the first place!

There are many options for funding, from bootstrapping to raising a big round of venture capital. Your goal as a startup is going to be to find the proper balance of that provides you the greatest amoung of operating flexbility while at the same time avoiding any kind of equity dilution in the process.