Venture Capitalists Get Creative

As venture capital funds face a cash crunch driven by the financial downturn, they are taking extreme measures to ensure they can fund their investments. read more

Community Banks New Financing Option For Start up Companies

When Amy Loera was looking for a loan to expand her family’s Mexican-restaurant business earlier this year, she applied at nine different banks. They all turned her down.

Many of the banks accepted her initial application but simply didn’t take things any further, she says. Some raised concerns about the nationwide downturn in the restaurant industry in refusing her request. And some told her that if she had applied a year ago, she would have had no problem.

So Ms. Loera turned to a local lender, Arrowhead Credit Union in San Bernardino, Calif., after a business acquaintance told her the credit union had given loans to other businesses in the community. She was approved for a $643,000 loan this summer. read more

Venture Capital Financing Slows Amid Economic Downturn

Silicon Valley technology startups are adopting a new business plan: deferral.

MerchantCircle Inc., a Los Altos, Calif., Internet startup, typifies the trend. Last month, company founder Ben Smith was in New York talking to media companies about raising $50 million, with which he planned to make acquisitions to fuel MerchantCircle’s growth. But as the financial markets tumbled this month, Mr. Smith canceled two trips to New York and a roadshow to Europe to raise the capital. For now, the fundraising is on the backburner.

“When we started the year we were pushing really hard for growth,” says Mr. Smith, who in 2005 founded MerchantCircle, which provides online advertising services for small businesses. “That’s just not as important anymore. Now it’s all about cash flow.” read more

Angel Investors Guide

They are the true believers in the world of start-ups. Inc Magazine presents a guide on searching for and courting these diamonds in the rough.

Inc Magazine Angel Investors Guide

Also, check out Jason Nazar’s Guide to Raising Money for a Startup Company. Jason is the CEO of Docstoc.com, an online community for document sharing.