Get Your Business Funded: Creative Methods for Getting the Money You Need

Overview

It is said that an entrepreneur is a person willing to take a risk with money to make money. If so, then it might also be said that a venture capitalist is an uber-entrepreneur, a super-capitalist, since a venture capitalist is a person who bets big on new business ventures that have huge upside and equal risk. Typically, they look for a 25 percent return on their investment, but they also know that that may come by investing in nine duds and one grand slam. Venture capitalist money usually goes to startups, but in this world, “startup” is a bit of a misnomer. It is not your typical, five-figure, “I dreamed a dream” sort of deal. Startups in this league are multimillion-dollar affairs.

In the movie The Social Network, about the founding of Facebook, Mark Zuckerberg (as played by Jesse Eisenberg) mentions that he might be able to make a million off of Facebook. Sean Parker (co-founder of Napster and played by Justin Timberlake) retorts: “A million dollars isn't cool. You know what's cool? A billion dollars.” Today, Facebook is estimated to be worth more than $50 billion. Very, very cool.

Maybe you are thinking that a VC sounds a lot like an angel investor, and to a certain extent you would be right—both invest in businesses. But that's really where the similarities end. Angel investors are individuals who usually have interest and experience in the sorts of companies that they look to invest in and who invest their own money. Venture capitalists, on the other hand, are ...