Imagine just listing a description of your small business online, then finding your inbox flooded with requests from investors willing and excited to fund your company.
No, it's not a dream. It is a reality, and several Web sites can help you do exactly this.
Entrepreneurs have the ideas, but they often need help finding exposure to investors. "Most people seeking capital don't have the means or resources to do that," says Richard Singer, CEO of
RaiseCapital.com, which was launched six weeks ago.
No matter how interesting a concept, without the proper resources, a company is likely to fail. Inadequate funding is the second-most-common reason why small businesses don't succeed, according to the
United States Business Administration.
There is a need for these services. In 2005, there were 25 million businesses in the country. An overwhelming number of them -- more than 99%, says the SBA -- were considered small, with less than 500 employees.
"People turn to us because we help bridge the gap between the entrepreneur and the investor," says Singer.
RaiseCapital.com is attractive to investors; it's free for them to browse the many small businesses and to contact entrepreneurs. They also can get email alerts based on specific industries of interest, whether that's film, software, Internet, fashion or real estate.
Of course, there is a price on the other side. There are three different packages, all of which give entrepreneurs an individual, searchable page on the site: Silver (about $30 per month) allows text, gold ($40 per month) permits text and photos and platinum ($50 per month) offers text, photos and video. Video is especially advantageous in attracting notice because "if you're a potential investor, you can see how
the entrepreneur presents himself," says Singer.
And RaiseCapital.com is drawing attention to itself as a company in order to build up its network further. "We're in the middle of a six-figure national campaign to attract investors and entrepreneurs. ... One is a full-page ad in
," says Singer. The company has also been featured on
Entrepreneur.com and the
National Venture Capital Association.
Like any small business, time is required for growth. "So far
we have a few hundred investors and 55 entrepreneurs," says Singer, but the site already gets between 23,000 and 32,000 hits a day.
"We have received numerous emails from investors and entrepreneurs who are excited that they have connected with each other," Singer adds.
A New Way to Network
Running a small business often requires you to explore multiple options, so another site helpful for making the investor-entrepreneur connection is
Go BIG Network. Founded a year ago, the company already has 50,000 start-ups and more than 2,000 investors online.
There is obviously a demand for its services from a wide range of companies including software, real estate and entertainment.
Connections on the site are subscription-based: About $30 a month entitles you (whether entrepreneur or investor) to make up to three contacts a day, and $50 a month or $150 a year gives you the opportunity to make up to 20 contacts a day, says Tyler Ransburgh, marketing manager at Go BIG Network.
There is no option of video or text, which are useful to give potential investors an inside feel for your business. However, it is free to create a posting and free for investors and entrepreneurs to respond to each other after the initial contact is made.
Investors can search by factors such as industry, funding amount or location.
How long does the process usually take? "The average time to get funded is from one month to eight months, depending on how large the agreement is," Ransburgh says.
Go BIG Network wants to continue helping small-business owners beyond finding capital, though. "We want to be a portal for small business and help them with every step of their process," Ransburgh continues. A new feature called "projects" will help entrepreneurs find someone who has specific skills they might lack, such as Web site designing.
The site also has forums through which small-business owners can build a network to get priceless advice. There's nothing like accessing the collective experience of other entrepreneurs who have been in a similar position.
So what's the success rate? "The problem
with finding this out is that when people get funding they usually go off-site and we don't hear back from them," says Ransburgh.
If you're thinking of starting your small business and you have stamina and a good work ethic, don't let lack of money be an excuse for why you're not following your dreams. Put your business out there, and catch the lucrative eye of investors.