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A Brief Venture Capital Discussion.

Food for thought when considering financing for your business…

© Preston Williams III Continued…


ENTREPRENEURS UNITE! (PART 2)

There is a severe lack of available capital in the aftermath of one of


the most extreme recessions/depressions this world has experienced
since “The Great Depression” which began in 1929 and lasted until
the late 1930s or early 1940s. Nonetheless, entrepreneurs should
continue to exercise caution when seeking financing to establish,
maintain or grow their companies.

Who you select to fund/finance your business can make a difference.

▪ Are they any of the following?


1. Angel Investor
2. Private Equity
3. Hedge Fund
4. Venture Capital
5. Commercial Bank
6. Investment Bank
7. Small Business Administration (SBA) STIR/SBIR
public/private funding venture?
8. "Small Business Investment Company" (SBIC)?

There are a few critical questions that should be addressed before


selecting a Financial Institution or a particular Funding Strategy:

Question(s):

▪ What is their target market: startup, expansion or existing (mature)


businesses?
▪ Industry: What is their industry focus?
▪ Do they offer conventional equity in exchange for investment or
royalty based financing?
▪ Do they offer: Acquisition, Refinance, Business Capital, Re-
organization?
▪ Does their portfolio include capital structuring, public/private
financing and/or international placements?
▪ What is their involvement level?
▪ Do they require management and/or board placement?
▪ Do they offer Joint Venture funding?
▪ If yes, what percentage and/or how much?
▪ Do they require cash collateral?
▪ f Yes, who is the responsible party?

© Preston Williams III Page 2 of 3


ENTREPRENEURS UNITE! (PART 2)

▪ Do they offer “Evergreen Funding”?


▪ If Yes, what is the timeline?
▪ If No, what is their funding cycle (Seed, 1st, 2nd, 3rd, 4th Round &
Exit)?
▪ What is their exit strategy?
▪ Do they have any referenceable opportunities (clients/partners) to
share?

Recommendation(s):

If you choose to work with any of the aforementioned sources, make


sure to check all available references.

For opportunities with the Small Business Administration, visit:


(http://www.sba.gov/services/index.html).

When seeking more traditional forms of funding, visit the institution’s


web site and research the organization’s performance through
various sources, including; stock reports, customer surveys and
online blogs.

For others seeking angel, venture capital, mezzanine or IPO


financing, check out The National Venture Capital Association’s web
site (http://www.nvca.org) before committing your ideas, business and
livelihood to a Vulture Capital Fund.

With the right partnership, anything is possible!

--
Preston G.M. Williams III
M.Sc. • CPA • CIS
Senior Partner & CIO
GBC® Global Services
Information Technology Solutions
Internet: http://www.gbc-inc.net
Twitter: PrestonW

Date: November 23, 2010

© Preston Williams III Page 3 of 3

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