Since start-up funding and growth financing for small- and medium-sized businesses has been in such short supply these past couple years, I thought posting about this CNNMoney.com / Fortune Small Business article on finding novel local investment would be a welcome change.

The article, originally published earlier in September, is about owners of several types of small businesses which opened, recovered, or expanded during the current economic crunch because local patrons were willing to invest in their favorite local businesses. Several types of money raising programs are discussed, including VIP cards/treatment for shareholders, $600 store and restaurant certificates sold for $500 (20% is a pretty good ROI), as well as “shares”.

Businesses showcased include restaurants, bookstores, pub/bar, and a fair-trade retail gift store. The focus of these financing efforts is on encouraging customers to become patrons or shareholders. And shareholders are a loyal customer base. Local shareholders feel vested in the company and want you to succeed.

Look to your customer base and your community. Including them as participants in your business and fostering a buy-local awareness could bring you that shot-in-the-arm financial boost to success.

Read the entire Love a local business? Buy a share article.

Steve Lange
Palo Alto Software

Tags: community, existing business, financing, funding, investment, new business, news, patronage, shareholders
Posted on September 29th, 2009 | No Comments »

Business owners face risks and compromises when they sell stock in their companies or accept outside investment. Tim Berry has post on this topic several times on his Up and Running and Planning Startups Stories blogs.

Reading Tim’s blogs, and watching the Yahoo! vs. Carl Icahn brouhaha reminded me of the novel Crytomonicon by Neal Stephenson. The story jumps between World War II and the present, and includes the search for hidden treasure, cryptography, high-tech startups, international business, venture capital investors, and the rights and claims of minority shareholders.

The bad guys are bad to the extreme, and I was pleased that the good guys win in the end. Of course, this is a work of fiction and the actions of the characters shouldn’t be viewed as archetypal (truth is, after all, stranger than fiction).

Still, I would recommend this book as a good read, and as a cautionary tale for entrepreneurs who are weighing the advantages and disadvantages of giving up total ownership for venture capital or shareholders.

Steve Lange
Senior Editor
Palo Alto Software

Tags: investment, investors, ownership, shareholders, startup
Posted on September 12th, 2008 | No Comments »