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From: chedley@inteloc.intel.com (CHEDLEY)
Newsgroups: comp.sys.mac,misc.invest,comp.ai
Subject: Re: Expert Systems Company Financing...
Message-ID: <1111@omepd>
Date: Mon, 5-Oct-87 22:21:35 EDT
Article-I.D.: omepd.1111
Posted: Mon Oct  5 22:21:35 1987
Date-Received: Fri, 9-Oct-87 05:07:00 EDT
References: <7260@dartvax.UUCP>
Sender: news@omepd
Reply-To: chedley@inteloc.UUCP (CHEDLEY)
Organization: Intel Corp., Hillsboro
Lines: 37
Keywords: Venture Capital, Govrt loans,...
Summary: Sources of financing start ups
Xref: mnetor comp.sys.mac:7732 misc.invest:1028 comp.ai:857

In article <7260@dartvax.UUCP> waltervj@dartvax.UUCP (walter jeffries) writes:
>
>I am not the business end of things but
>would appreciate any comments/experiences that people may have with getting
>capital (sources, things to be careful of, etc.).  Of course, if you want to
>invest money as well as advice that would be appreciated too :-).
>

There are three major sources of money for start-up financing:

1) Money from the owners/starters of the company: In this case it is your and
your partners' own savings and personal loans (credit cards, Home equity loans,
personal unsecured bank loans,..)
   MONEY FROM THIS SOURCE IS TYPICALLY INSUFFICIENT TO GET THE BUSINESS ROLLING

2) Venture Capital: This money belongs to funds(*), companies or private
individuals who are looking to invest in start-up businesses. In return they
require the "ownership" of a portion of the business, along with some other 
conditions (oversight on the books of the company, a say in management 
appointments, options on the share of the company if and when it goes public,...etc) 
   MONEY FROM THIS SOURCE IS RELATIVELY AVAILABLE. 

3) Govrmt Money (State/Federal) : This is typically an easy conditions loan
(low interest rate,  long grace period, easy payment schedule..) provided by 
some state or federal agencies to promote small and start companies.
Try to tap this source to the max. And you do not have to be a woman or a member
of a minority group to qualify for this cheap source of financing.
   GOVRNMT MONEY IS THE CHEAPEST SOURCE OF FINANCING START UPS

Due to the constraints of the venture capitalist's money, it is advantageous
to leverage it as much as possible with the other sources's money. That is,
for each dollar from source 1 or 3, get the maximum venture capital you can
reach for.

(*): There are even a few venture capital mutual funds out there.

..CHEDLEY..