Venture Capital Funding for Small Businesses

Background

Everyone is looking for a grant or loan for their business. In future posts, I will discuss some government grants/loans tools that will be launched for assisting businesses in locating what is available and how to apply. However, given these times of reduced government spending and difficulty in securing loans from our banking system, private investment is certainly an option worth discussing and there are government resources available to help navigate the way.

Venture capital is a type of private equity capital typically provided to start-up, new, and growing companies – with the eventual anticipation of generation a return, public offering, or sale of the business. Typically, venture capitalists will fund a business for partial ownership or shares of the company they are investing in. These are usually institutional investors and wealthy individuals and the resources are combined through these investment firms. For the down and dirty basics of VC, check out wikipedia, the free encyclopedia. Below are several government resources that can assist:

Government Tools for Financing Assistance

1. Active Capital is the premier Website for entrepreneurs seeking private investment and private investors seeking deals in a secure and protected environment consistent with all investment laws. It is a simple, secure and low-cost way for investors and small companies to find each other – it’s an Internet-based listing service for securities offerings of small, growing companies located throughout the nation, that are viewed anonymously by accredited investors. Active Capital rises above similar sites because of its legal status, action orientation, cost structure, and degree of support for growing entrepreneurial companies.

1. The Small Business Investment Company (SBIC), part of the SBA, is designed to improve and stimulate the national economy and small businesses by stimulating and supplementing the flow of private equity capital and long term loan funds for the sound financing, growth, expansion and modernization of small business operations while insuring the maximum participation of private financing sources.

1. The New Markets Venture Capital (”NMVC”) Program is a developmental venture capital program designed to promote economic development and the creation of wealth and job opportunities in low-income geographic areas and among individuals living in such areas. Through public-private partnerships between the SBA and newly formed NMVC Companies and existing Specialized Small Business Investment Companies, the program will meet the unmet equity needs of local entrepreneurs through developmental venture capital investments, provide technical assistance to small businesses, create quality employment opportunities for low income area residents, and build wealth within low income areas.

1. Business.gov can also assist small businesses in finding funding resources. They have several pages dedicated to funding for specific business types, partnerships, import/export, as well as information on venture capital financing.