Banks, VC and Gov - Oh my!

[Tavarez]

I've been in business planning and preparation for a few months, and it's coming to the point where the need for capital comes near. I'm not looking for capital here, but instead for information and opinions.

What are your experiences with banks and VC? I understand that each of the different investment opportunities have their merits, and sometimes they mingle closely together, but money can lead to people/organizations doing crazy things.

Ever had them, do something crazy to you - if not, how did you protect yourself (like laying out an entire pre-vestment battleplan)?

[jasaunders]

Not sure I fully understand the question, but you are right that any investment source has its merit, and its advantages and disadvantages. You already threw out both debt and equity financing in your post. The first step would be to identify what type of funding you need. Certain businesses lend themselves to different types of financing, and certain amounts fall into traditional financing ranges. If you are seeking $50,000 you are not looking for VC. Of course, there can be a combination of debt and equity financing.

[Vaze]

I founded and bootstrapped two companies and raised significant venture capital for a third. In my experience banks tend to lend money to people who really don't need it and VC's will try to skin you alive even if you have something incredibly compelling and unique.

As I'm sure you've heard before, try going to family, friends, friends of friends, angel investors, credit cards and every other possible source you know to raise the initial round. Get you business up and running and get some traction then try the bank/CV route you will get much better terms.

Best

Vaze