Raising Money Online For Your Home Business

Find Information, Networking Groups, and Finance Sources on the Internet
By Nora Caley

If you are looking for a loan or investment to finance your business, start with an online search. The Internet can help you find out where to seek funding, get advice from experts on how to find capital, check whether a source of financing is legitimate, and even prepare an online profile that can enable you to respond to investors’ and lenders’ requests for more information.

Find Information
    One place to start is www.business.gov, which calls itself “the official business link to the U.S. Government.” Click on Find Loans & Grants, then fill out the form to find programs that offer loans, venture capital, seed money, and in some cases, grants. You will be directed to links to the U.S. Small Business Administration, micro-lenders in your state, venture capitalists, and other sources.

    If you are looking for a loan, visit www.BankRate.com to compare rates on mortgage loans, home equity loans, and credit cards. The site offers credit calculators that tell you approximately how much you will pay each month, based on the type of loan, interest rate, and the loan term. The credit card comparison section shows how long the low introductory rate lasts, and which cards offer airline miles or other extras. There are also links so you can apply online.

    Another source of loans is www.prosper.com. The peer lending site lets borrowers request an amount of money and set a maximum interest rate. You can write a brief description of what you intend to do with the money and why you are sure you will be able to repay it. Then lenders bid on your loan. When the bidding ends and the loan is funded, the money is deposited into your bank account. You make monthly payments.

    If you ask your friends and family for a loan, visit www.VirginMoney.com to formalize the agreement. The site creates the documentation that shows the interest rate and payment schedule. VirginMoney reports your repayment data to credit reporting agencies.

Venture Capitalists and Angel Investors
According to the MoneyTree report from Price Waterhouse Coopers, National Venture Capital Association, and Thompson Reuters, venture capitalists invested $3.0 billion in 549 deals in first quarter 2009. That was down compared to fourth quarter 2008, when venture capitalists invested $5.7 billion in 866 deals. Among the businesses these investors funded, software was the biggest category, followed by biotechnology. Visit the Arlington, Virginia-based National Venture Capital Association at www.nvca.org for information about the more than 700 venture capital firms in the U.S., and tips on how to approach them.

    To find angel investors, high net worth individuals who seek to fund up-and-coming companies, try the Lenexa, Kansas-based Angel Capital Education Foundation. The ACEF’s web site, www.angelcapitaleducation.org, contains a list of angel groups. Click on Resources, then Listing of Groups for links to the investors’ web sites. Then visit the sites for information on how to submit a business plan.
Facebook and Twitter
The Internet can also help you network to find people who might be interested in financing your business. Facebook, the social network site, has a business section. You can communicate with “fans,” people who sign up to get updates about your company. On Facebook’s home page, click on, “To create a page for a celebrity, band or business, click here.” Then select from the pull-down menu whether your business is a consumer product, online store, professional service, etc. Then enter the name of your company and create your page, which will show your mailing address and a brief overview of what your company does.
Read the Terms of Use, the rules about joining Facebook. For example, you may not use the site to harvest emails from other users for the purpose of sending unsolicited emails.

Twitter is another free social networking site. It’s a short messaging service that allows users to broadcast text messages of up to 140 characters, about two short sentences. Although some Twitterers use the service to update their friends about mundane tasks, some use it to keep others updated about their small businesses. On Twitter.com, you can follow other people’s messages, known as Tweets. You can also invite other people or small businesses to follow your Tweets.

More Networking
Other sites include Ning, RingSurf, Yahoo Groups, and Meetup. Each site offers many different types of groups where people get together to talk about hobbies or interests, including entrepreneurship. Some groups are free, and each has its own process for how to join. You can find a networking group by doing a search for “business” or by searching a term that describes your business category. You can also start your own group. Send emails to your friends, vendors, former coworkers, and others to invite them to join.

Sales and Marketing
Another way to raise money for your company is to increase sales, and reinvest the revenues back into the business. So you need to get the word out about your company. If you have a web site, be sure to include its URL on all your printed materials and also as part of your email signature.


Start a blog (web log) in which you write about your company and also about your area of expertise. For example, if you are a financial planner, write a blog that offers tips on how not to panic when the stock market fluctuates. Update your blog frequently. Ask your associates, and other bloggers, to provide a link to your blog on their blog. Offer to do the same for them. Send Tweets to people alerting them you have a blog, and update people when you add something new to the blog or to your site. Your blog could be a page of your website.

Visit web sites such as Blogger.com and ProBlogger.net for tips on how to start a blog and how to write posts. You can include a comments section in your blog, where people may post comments or suggestions after they read your post. Those comments might provide another source of contacts.

Other Groups
    Other sites such as LinkedIn.com, Ryze.com, and xing.com offer networking for business professionals. All are free, and they offer ways for you to connect with former colleagues, clients, or industry experts who give free advice. Some groups send invitations to everyone in your email address book, and others let you choose with whom you communicate.

    There are also message boards where people communicate online about various topics. Find a small business forum and post a question. For example, ask whether anyone knows if any universities are sponsoring business plan contests that offer the winner seed money. Or you may post answers to people’s questions and create some visibility for your business.

    Don’t forget YouTube.com. You can post a short video, such as a visual demonstration of how to use your product. Or do a how-to video. If you are a personal chef, for example, prepare a video on how to cook something healthful.

Connecting Everything
It’s important to connect all these different web appearances into a strong Internet brand. Add a Twitter link to your blog, so that visitors can read the short messages you’ve posted on Twitter. The link will say, “Follow me on Twitter,” and send readers to a page that reads, “Hey There! [your business name] is using Twitter.” There, your followers can read several of your Tweets.
When you post a comment on someone else’s blog, include your blog’s URL with your comment. When you participate in a forum, include your web address or your Twitter address. Become a fan of other businesses on Facebook, and post comments on their pages. Be sure to upload your YouTube video onto your web site.

    Finally, do not post your business plan online, because you don’t want the proprietary information to be available to everyone. Your goal with your online search is to find contacts. When you make a contact and you are sure it’s a reputable bank, an investor who is a member of one of the investment associations, a friend that you know or a family member, then you can make arrangements to send them more information. HBM

Nora Caley is a freelance writer based in Denver. She specializes in business articles.

Previously published in the August 2009 issue of HOME BUSINESS® Magazine, an international publication for the growing and dynamic home-based market. Available on newsstands, in bookstores and chain stores, and via subscriptions ($15.00 for 1 year, six issues). Visit www.homebusinessmag.com

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