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Starting a company with no money

Paul wrote:

I'm trying to start a company with no funds of my own to speak of. My idea is sound and planned out for success but I have no money to my name... I have looked into government grants and it seems more likely to get money to put internet through the Congo than to receive funds to start a new business venture. I’m at a loss for where to go next and how to provide the early funding to get an investor or a loan to start my business. 

Hi Paul.  Unfortuantely there is no straight-forward answer to this because it depends on many factors unique to the business.  If you need money to buy inventory, equipment, facilities -- things with capital value -- then you could potentially get a bank loan, perhaps an SBA loan.  If you need money for operating capital, advertising, payroll, etc, then you need to look at getting equity financing (and sure, if you find a grant proposal you'd be a fit for, give it a shot, but you are correct in thinking that you need to look elsewhere).

Assuming that your capital need is not bank-fundable, then it depends on how much you are looking to raise and what the business model is.  If you needs millions, and you have a business model that supports it, you might look to venture capital.  If you need less, then you might look to angel financing -- or put another way, look to wealthy individuals.  

To find a list of wealthy individuals you need to network, ask around, make calls, get referrals, etc.  There's a lot of legwork invovled and it will take some time.  But this is the only way to do it -- don't expect to make any meaningful progress poking around on the interent for a list of angel investors.  Go to your local chamber of commerce meetings, see if there are any startup groups in your area, and just keep checking and asking, checking and asking.  Great investors might come from successful people in a related area to your business.  Asking doctors to be funders for a new medical device or medically oriented software/website business, for example.  

When you do compile a list, you need to be prepared to take them through your vision and pitch.  There's a lot of content written about this on this site already, and if you are serious you should look at the 8 slide investor pitch book I published earlier this year.  Those who invest will invest in you and your passion and your story.  The only way to convey that to them is to get out there, track them down, and ask them to listen.

Best of luck to you.

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    Starting a company with no money - Blog - McStartup - tasty advice for startup companies
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    Starting a company with no money - Blog - McStartup - tasty advice for startup companies

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