Your Net Foothold - Financing Your Start-Up

The dot.com bug has bitten you. You quit your job to start an Internet company that will revolutionize the way businesses interact with each other. One problem — your new company (BIZ.com) needs capital, and lots of it, to develop its infrastructure and execute its strategy. Where will you get this capital and what will you have to give up for it? This three-article series will briefly examine some of the key issues involved in financing your new startup -- financing sources, choice of security and compliance with federal and state securities laws.

Because each financing transaction is unique, it is difficult to generalize the aspects of a transaction. However, the sources of capital for BIZ.com generally will include: founders, friends and family, angel investors and venture capital funds. A recent phenomenon, the incubator (or accelerator) is also an alternative in certain situations.