Sources of Capital considered in starting business

Sources of capital

1. Funding Sources for Your Business

2. Many entrepreneurs do not know where to acquire funding
when starting out or expanding. If you know where to look,
you'll find that there are many different sources for
entrepreneurs to raise capital.
Money is very important in starting up any kind of business
may it be small or big. Money is used as a funding source or
a capital. 
One major reason why small businesses fail is because the
owner lacked necessary funds.
Money is needed for equipment, property and more essentials
for your small business.

3. Angel Investors
Angel investors are generally individuals or groups who
provide capital from their personal assets to assist you with
starting your business. These types of investors are looking for
startups that have good potential for earnings.
Since they are investors, you'll be expected to present them
with a portfolio that is favorable. This differs from venture
capitalists, who are more interested in organizations that are
already doing well but need more sources of capital.

4. Venture Capitalists
Venture capitalists (VCs) are usually groups of individuals that
provide capital through an organization they have established.
Generally, VCs like to fund companies that are already
somewhat established, and in need of more finances.
VCs are looking for high returns on their investments (your
business). This is not unusual for investors, but some VCs may
want to be involved in your business decisions after they grant
you some funding

5. Small Business Loans
The Small Business Administration (SBA) has been established
to assist business owners with their businesses. A small business
loan through SBA partner lenders, while competitive, are
guaranteed by the SBA and come with generally lower rates
than traditional loans.
Small business loans are not the only form of government
assistance. A source of capital often overlooked by
entrepreneurs is government grants.

6. Crowdfunding
Crowdfunding is a method of raising funds from individuals,
using an internet-based platform.
This method depends upon the generosity of people, and upon
the exposure your crowdfunding campaign receives.
To have a successful crowdsourcing endeavor, you must be
able to win the crowd's support. Create a reasonable monetary
goal, and decide on a reward for the crowd that assists you. This
could be public recognition for donations or letting them be the
first ones to receive your product.

7. Credit Cards
Many companies use personal and business credit cards to
finance immediate expenses. Credit cards are convenient when
you don't have the cash to make purchases at the moment.
If you do not have the means to make your monthly payments,
credit cards can exponentially increase your debt with high
annual percentage rates.

8. Personal Savings
Friends and Relatives
Angels
Corporations
Venture Capitalists (VCs)
Going Public (IPOs)

9. Consider the impact of the Investment
Keep it strictly business
Settle the details up front
Create a written contract
Treat the money as “bridge financing”
Develop a payment schedule

10. Individuals who wish to assist others in their business venture
Usually found through networks
Reasonable expectations on equity position and ROI
Often passive, but realistic perspective about business venture
Exit strategy is important

11. Funds are more specialized versus homogeneous
Feeder funds are emerging
Small start-up investments are drying up
High expectations of equity position and ROI
New legal environment

12. Choice of Securities
Control Issues
Evaluation Issues & Financial Covenants
Remedies for Breach of Contract
Business Model

13. Commercial Banks
Trade Credit
Equipment Suppliers
Savings & Loans
Insurance Companies
Credit Unions
Private Placements

14. Character
Capacity (Cash Flow)
Capital
Conditions
Collateral

15. Individual Attributes
Passion
Integrity
Experience
Staying Power

16. Can the business survive?
Will someone actually purchase the product or service?
Can the business produce the product or service
economically?
Can the business make money?

17. What level of paid in capital are the primary founders
contributing?
What percent of the total capital funding needed is being
requested?
How is the capital being used in the business?
Is the capital requested reasonable?

18. Potential growth in the market?
Competition
Location
Form of Ownership
Loan Purpose
Payoff

19. Economy
Industry
Interest Rates
Business Experience
Individual(s) Experience
Inflation Rate
Demand for Money
Risk