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  • So you’re setting out to capitalize (both literally and figuratively) your new venture. Should you seek to raise money from friends and family?

    A recent survey from Pepperdine University’s Graziadio School of Business shows that about 13% of small businesses sought capital from friends and family this year.

    Here are three points from startup mentors to keep in mind when raising money from friends and family:

    1. ‘No’ is not a rejection – just because you think your idea is great, it may not resonate with everyone.
    2. Use your own cash as long as possible – get to the point where you can clearly articulate you offering, and if possible, achieve concept validation.
    3. A positive signal to other investors – having a “money vote” is good, but when its from family it sends a signal that you’re all in.
    4. Real financial risk – if things don’t work out, family gatherings can be a little stressful.

    Read more in the WSJ

    Image courtesy of Flickr and Evil Erin

    There are many ways to fund a new business project. Traditional bank funding, business cash advances from sites like BusinessCashAdvance.com, venture capitalist funding, and private placements, have long been the mainstays of corporate finance. These can be very effective, but there is a modern alternative: crowdfunding. This allows you to gather the donations of a large amount of people to finance your project. The donations can be small, but since you are accessing many people, they can add up to large amounts.

    If this sounds like the way charities work, you’re on the right track. There are significant differences between crowdfunding and soliciting charitable donations. Donors, despite the title, get something back in exchange for their money. The return doesn’t have to be monetary. Sites like Kickstarter allow people to set up projects where the payback can come in the form of something as simple as a download or something fairly elaborate. We offer tips on how you can plan, grow, and connect with your new crowdfunding project. [click to continue…]

    A Private Placement is a capital transaction between an issuer, the entity seeking to raise capital, and an investor, or group of investors. When discussing a private placement, its usually in the context of a private company raising capital; however, public companies will also seek to raise capital using a private placement. In the latter case, this type of transaction is known as a “PIPE,” which stands for private investment in a private entity.

    Private placements fall under what is know as Regulation D, or Reg D of the Securities Act of 1933. Private placements are also sometimes called Reg D offering. Reg D is what provides for the registration exemption under the Securities Act requirement that any offer to sell securities must either: 1) be registered with the SEC, or 2) meet an exemption. The exemptions provided under Reg D are known as Rule 504, Rule 505 and Rule 506.

    [click to continue…]

    Low-Cost Franchise Opportunities Gain Popularity

    Low-Cost Franchise Opportunities Gain Popularity

    The most popular franchise opportunities in a new report from Franchise Business Review reports that low-cost franchises – those with an average investment of less than $150,000 – are among the most popular and sought after. One example is 1-800–GOT -JUNK, one of the top low-cost franchises.

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    Private Placement Market Opens Up With The JOBS Act

    Private Placement Market Opens Up With The JOBS Act

    Issuing a Private Placement might get a little easier for small businesses seeking to raise debt or equity using a Private Placement. One of the big changes is the proposed elimination of the prohibition on advertising and general solicitation. Are you ready? The JOBS Act Opens The Private Placement Market The President recently signed the […]

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    Six Steps To Raising Venture Capital – Its About Laying The Foundation

    Six Steps To Raising Venture Capital – Its About Laying The Foundation

    This article talks about laying the foundation to raising venture capital (I think there’s insight here for non-venture capital as well). The first three steps of laying the foundation include building a relationship with a person, not the firm; get personal, and give freely and authentically; and get a meaningful referral. Read more for the […]

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    Two Simple Steps For Staying Out Of Hot Water

    Two Simple Steps For Staying Out Of Hot Water

    Part of the process of structuring your private placement, or offering, is to target an IRR, or Internal Rate of Return. But unless you’re constantly in the market, you’re probably just taking a shot in the dark. The solution of course is to talk to the market. Go out and have discussion with potential investors […]

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    Private Money And Blue Sky Laws

    Private Money And Blue Sky Laws

    Today I’m going to show you a cool tool right here on TransCapital Pro My consulting clients have been asking me about Blue Sky laws and what they need to do to be in compliance. Well, because it would be difficult to be fluent in each states Blue Sky laws, I built this interactive map […]

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    Investment Funds – Structure and Mechanics Part II

    Investment Funds - Structure and Mechanics Part II

    In the last video we ended with a slide that showed the tremendous leverage that is available on the General Partner’s capital. Before we dig into the economic mechanics of an investment partnership, we need to understand a few concepts: Carried Interest Preferred Return Waterfall Carried Interest is defined as a share of any profits […]

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    Investment Funds – Structure and Mechanics Part I

    Investment Funds - Structure and Mechanics Part I

    You want to establish an investment fund when you are seeking capital to pool capital for investments that have yet to be identified. Your investors will be committing capital to you based on your experience, track record and the investment profile, or investment theme that your Investment Fund will be pursuing. Since the investors are […]

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