Keeping a Clear Fundraising Paper Trail

This article was written by David Worrell of Entrepreneur.com. He is the author of the e-book Finding Funding.

Even in today's fast-paced business world, raising money relies more on paper and ink than point-and-click. Whether you are looking for funds from a bank, a VC or just a rich uncle, it is crucial to communicate your ideas and plans on paper. And what a pile of paper! When done right, the fundraising process requires a dizzying array of forms, contracts, plans and projections.

And when it's not done right? Mistakes can lead to serious and long-lasting repercussions, as Cary Daniel learned several years ago. Daniel says he learned while working in a previous business how not to raise money. "In one angel deal, we raised $200,000, but later, additional funding was held up because we did not do the right documentation," says Daniel, 37. "It took the lawyers a month or two to fix what they [hadn't done right] a year [before]."

These days, Daniel doesn't cut corners. As CEO of Business District, Daniel assists more than 1,000 business brokers and entrepreneurs in buying, selling or financing businesses. Having the right applications and contracts available for his customers' financing needs is critical. ...