There is no private source of risk capital readily available for our kind of small businesses, comparable to that which is readily available to businesses planning to go public. To remedy this the School of Small Business Practice proposes that a new source of risk capital be developed, specifically for privately owned small businesses. This would be an “interested” investor grouping, people who would consider investing $2,000 to $10,000 in a small business start-up or expansion. A major incentive would be the opportunity for investors to act as advisors and mentors (thus “interested”) thereby helping to ensure the success of the venture. A better than average return and attractive buyout options that the small business by-laws would safeguard would be the financial reward. This approach has been used by the School of Small Business Practice itself. It’s risk capital was provided by sixteen “interested” outside investors. The first step in developing this new funding source requires a sizeable database of small businesses who would like to attract the attention of such “interested” investors as a strategy basic to their future funding needs. When such a database has been achieved, the School will advertise its existence and the new investment opportunity it represents. Once it is functioning, small businesses must recognize that their by-laws need to be investor-friendly. Illustrative templates for such by-laws are one of the many resources provided by the School. So help reshape the future. Join our secure “interested” investor database.
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