How to Raise $1 Million in a Year

Most entrepreneurs using the NSRO outsource the legwork to a consultant or at least a lawyer or accountant who is familiar with securities registration. Murphy hired Public Company Management Corp., a consulting firm in Las Vegas that specializes in raising capital for small businesses. After the paperwork is submitted, it usually takes only a couple of months to be approved, Apenbrink says.

Once you've cleared the registration hurdle, the next challenge is selling your stock. Nevada allows a business owner to serve as his own "agent of the issuer," or salesperson of the stock, but it can be difficult to juggle the added responsibility. "I was serving as my own agent of the issuer, but I've learned I can't do it in my spare time," Murphy says. "So I'm talking to a couple of people about taking on that role."

Trussell agrees that a motivated agent is crucial. "Make sure you have someone in line to raise the money, an agent of the issuer in Nevada who's a go-getter and will go out there and get it raised," he says. "If not, it's probably better to do it in your own state. I have a Rolodex of people I could call in Texas, but [when selling in another state], it takes a while to build rapport."

Selling anything is challenging these days, but NSRO companies are betting that it's doable. Trussell purchased a list of 7,500 qualified investors in Nevada and he's contacting them all by direct mail.

Murphy says he looks for "people who can pull the trigger on their own investments" and who may be burned out on Wall Street and hopeful about a promising, profitable small company. As investors write checks, all the money goes into escrow and cannot be withdrawn until the offering is complete, providing an extra layer of protection for investors.

"The whole key is getting to the point of raising money as fast as possible," Chang says. "And you can get there quicker in Nevada."