Over 50% of new business fail within the first five years. A large majority of these failures is due to a lack of funding. Finding the right funding at the right time from the right sources is essential for the success of your campus area guide website business.

There are several ways you can raise the necessary capital for your business:

• Self funding
• Friends and Family
• Angel Investors
• Grants
• Venture Capitalists
• Banks (including SBA guaranteed loans)

For a Campus Area Guide Website business, we recommend self-funding your business or using friends and family to fund the business. Let's look at each type of funding and the positives and negatives for your business:

Self Funding

Self funding is funding the business using personal savings, credit cards, home equity loans, investment sales, or other personal assets. Often called "bootstrapping" your business.

Positives

• There are no equity partners to pay off if the business makes it big.
• You have control over the direction of the business and won't be forced out.
• You don't have monthly payments of a business loan to worry about taking away from your cash flow.

Negatives

• You will have your own assets at risk if the business fails.
• You may pay high interest on the credit cards or lose the potential gains in savings or on the investments.
• You could lose your house if you use home equity and end up not being able to pay your home mortgage bill.
• Your business growth may be slowed by a lack of funds.

Friends and Family

Friends and family is another way you can raise cash for your business. This is a risky proposition: are you willing to give control to a family or friend? If you just take a loan - how will your relationship be affected if you cannot pay it back? Are you willing to lose your friendship or be afraid of seeing your relative at the next family get together?

Positives

• Typically, you can structure this as a loan so you do not have to give up equity.
• Be sure to draw up a contract to make sure your friends or family are protected.
• Funds are often available quickly.

Negatives

• You can usually only raise this money once.
• There can be downsides in your personal life if your business fails - or if you fail to pay back the money on a loan.

Angel Investors

Angel investors are high net worth individuals who have cash to invest in your business. They often work in groups to invest much more money in companies and have the ability to do "riders" to add personal funds to a particular investment. You typically engage with an angel investor before venture capital and a local angel investor might be willing to invest in a campus area guide website.

Positives

• Angels provide a network of contacts and mentoring opportunities for you.
• Angels invest with an exit strategy in mind - they are patient and do not require monthly payments to be made.
• Money is typically available fairly quickly.

Negatives

• Though the money is made available quickly once the investment decision is reached, it can take some time to work through the process of an Angel group to receive funding. For a small website business such as this, it will be difficult to make it through the process.
• You will have to give up equity in the company.
• You will be required to report regularly and thoroughly to the Angel investors.
• It is hard to get their attention.

Grants

Grants are provided by government agencies and local universities to spur investment growth in a certain area. It is unlikely you will receive a grant with a campus area website guide business. Check with the University Center of Entrepreneurship to see if you qualify for any of their grant programs.

Venture Capitalists

Venture capitalists are in the business to make a lot of money and hit it big with every investment. Unless you are revamping the campus guide industry and focusing on a national launch with a great (unique) business plan, you can count venture capitalists out of your startup funding. Besides, they require a lot of equity to invest!

Banks

Banks are most likely not going to loan you money for this type of business - there are little to no assets.

As you can see, there are many options for funding your campus area website. The most likely sources of funding are bootstrepping (self-funded) and friends and family funding. We recommend pursuing both of these strategies to fund this small investment business.