When I started Neuvation, I put together a comprehensive business plan, put on a jacket and tie (something I have not done since) and marched down to the local bank to get start up money. It quickly became crystal clear that banks were looking for collateral and not ideas. That has not changed.
What has changed is that the Internet has provided a good method to seed start ups. It’s called crowd funding. Its beauty is its simplicity. Post your idea on one of the crowd funding sites like www.kickstarter.com and anyone can invest.
I believe that the vast majority of investors are friends or acquaintances of the poster. Use social networking to develop your contact list (Facebook, Linkedin, etc.).
If your idea is not funded to the minimum required to fund your project you get no money. If you meet the minimums (which you determine), the crowd funding site gets their commission (Kickstarter takes 5%) and you get the rest.
Investors have no equity. They simply get the first production of your idea (or whatever you offer for their investment).
Combine this with www.Alibaba.com (the Chinese Ebay of manufacturers) and any idea for any industry can be funded and sourced through any Internet connection.
So there are no more excuses, no real barriers to entry, anyone can start their own dream business out of their house with little or no money.
Thanks for reading – John Neugent
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