Raising Private Money
Other than borrowing from banks, large businesses raise funds by offering public shares in Initial Public Offerings, (IPOs).
In this case, companies files with the securities commission for permission to sell shares to the public.
In this regard, banks are given permission to sell shares across the country.
Although smaller companies are do not generally raise funds across state lines, the can raise funds within their sates of operation with permission of their state securities commissions.
The reason smaller companies do not participate in public offerings in that costs are prohibitively high and the legal requirements are so intricate for their comfort.
There however are laws that allow smaller business people to form syndications that legally allow them to raise funds from the public.
The cost of forming a syndication can range from $25,000 and up.
The beauty however is if a businessperson is creative enough, they do not have to come up with the funds upfront.
The target market here will be people who have cash in the bank and are getting low returns on Certificates of Deposit on any other low earning investments.
It is important to find such people in your neighborhood, where they can trust you and believe that their money is secured.
The trick here though is that a business person will have to have a strong product that can be secured.
In some cases, such a business person may give up part of their equity generated by the new funds in the business.
As the argument always goes, it is better to have a small percentage of something than a whole percentage of nothing.
The second method of raising funds, especially for technology companies is through venture capitalists.
In this regard, a business person will need to approach a venture group in the area and present their idea, and hope to get funding.
This is another expensive way of raising capital but a well worth option.
Most of the large technology companies in existence today were funded by venture capitalists.
The third and probably cheapest and least known way of raising capital is through people's retirement funds.
As it, people's retirement funds have earned an average of 2.
07% interest for close to 10 years now.
During that same time, inflation has hovered around 5%, meaning that the retirement funds are on a losing end.
The other fact on IRAs is that most of the monies rolled over into annuities and other securities are tied for years and attract huge penalties if drawn before maturity.
These funds often have no insurance.
As a matter of fact, retirement funds lost about 47% of their value in 2008.
Armed with these facts, it is not hard to help people increase their Returns On Investment (ROI) in their Individual Retirement Accounts.
I know the question in most people's minds is the penalties involved in drawing the funds.
Well, your fear is based on long portended notion that the IRS does not allow people to invest their retirement funds.
As a matter of fact, in 1974, IRS allowed the formation of third-party IRA custodians whose mandate was, among other things to act as a conduit of IRA funds into various investments.
This therefore gave individuals power to invest their retirement funds tax-free or tax deferred for the highest returns in the market.
This is where small business owners come in.
Create a plan on how you can give high returns and how the people's money will be secured.
In this era where many Ponzi schemes pop up and scammers are all over the internet, it is important that the investors feel that their funds are secured and that they are dealing with an honest person.
In this case, companies files with the securities commission for permission to sell shares to the public.
In this regard, banks are given permission to sell shares across the country.
Although smaller companies are do not generally raise funds across state lines, the can raise funds within their sates of operation with permission of their state securities commissions.
The reason smaller companies do not participate in public offerings in that costs are prohibitively high and the legal requirements are so intricate for their comfort.
There however are laws that allow smaller business people to form syndications that legally allow them to raise funds from the public.
The cost of forming a syndication can range from $25,000 and up.
The beauty however is if a businessperson is creative enough, they do not have to come up with the funds upfront.
The target market here will be people who have cash in the bank and are getting low returns on Certificates of Deposit on any other low earning investments.
It is important to find such people in your neighborhood, where they can trust you and believe that their money is secured.
The trick here though is that a business person will have to have a strong product that can be secured.
In some cases, such a business person may give up part of their equity generated by the new funds in the business.
As the argument always goes, it is better to have a small percentage of something than a whole percentage of nothing.
The second method of raising funds, especially for technology companies is through venture capitalists.
In this regard, a business person will need to approach a venture group in the area and present their idea, and hope to get funding.
This is another expensive way of raising capital but a well worth option.
Most of the large technology companies in existence today were funded by venture capitalists.
The third and probably cheapest and least known way of raising capital is through people's retirement funds.
As it, people's retirement funds have earned an average of 2.
07% interest for close to 10 years now.
During that same time, inflation has hovered around 5%, meaning that the retirement funds are on a losing end.
The other fact on IRAs is that most of the monies rolled over into annuities and other securities are tied for years and attract huge penalties if drawn before maturity.
These funds often have no insurance.
As a matter of fact, retirement funds lost about 47% of their value in 2008.
Armed with these facts, it is not hard to help people increase their Returns On Investment (ROI) in their Individual Retirement Accounts.
I know the question in most people's minds is the penalties involved in drawing the funds.
Well, your fear is based on long portended notion that the IRS does not allow people to invest their retirement funds.
As a matter of fact, in 1974, IRS allowed the formation of third-party IRA custodians whose mandate was, among other things to act as a conduit of IRA funds into various investments.
This therefore gave individuals power to invest their retirement funds tax-free or tax deferred for the highest returns in the market.
This is where small business owners come in.
Create a plan on how you can give high returns and how the people's money will be secured.
In this era where many Ponzi schemes pop up and scammers are all over the internet, it is important that the investors feel that their funds are secured and that they are dealing with an honest person.
