The picture is a representation of an ancient Japanese money spirit.

As a new start-up, a money spirit would be nice. One of the biggest challenges to new start-ups is funding. Since the recession banks have been on lock-down and it’s all most impossible to acquire a bank loan for start-ups. Truthfully it wasn’t easy before the recession. What’s an entrepreneur to do?

Today there are websites that bring entrepreneurs and investors together.  The four major types to be discussed in this blog are the following: online linking, investor centered, start-up incubator, crowd funding websites, and investor centered websites.

Online linking websites matching entrepreneurs to investors’ set-up an open collaborative environment by employ the mechanics of Facebook, Twitter and LinkedIn.  These websites give autonomy to both the investor and entrepreneur. The investors must have money to join (200K per year or a million soaked away).

AngelList , https://angel.co/, is a website that allows entrepreneurs and investor to network together. Entrepreneurs can use their executive summary for the profile. The entrepreneurs will contact investors and push their business. Additionally, investors can follow entrepreneurs by topic area and get matched to them based on location. Angel Networks exist throughout the country; these networks hold events.

IdeaCrossing, https://www.ideacrossing.org/default.aspx, features a proprietary matching algorithm that automatically connects entrepreneurs and investors based on their profiles. The investor and privately see matches and then reach out to entrepreneurs.

Investor centered websites allow investors (angel or venture capitalist) to look at a list of start-ups and decide to make an investment. Go Big Network and Fundingpost the biggest of these types of websites. These websites require a fee for the entrepreneur to post.  The problem with these websites is that the investor has too much autonomy. It more of buyers beware for both the investor and entrepreneur.

Go Big Network , http://www.gobignetwork.com/, has accommodated over 300K to connect to millions of dollars.

Fundingpost, http://www.fundingpost.com/, has over 11,000 CEOs and 750 Venture Capital Fund.  Events are held attending in 22 cities nationwide.


Startup Incubator type websites bring together investors and entrepreneurs just like AngelList  and IdeaCrossing with another layer which is mentoring the startup through the entire process.

Confoundr, http://www.cofoundr.com/, is a community for entrepreneurs, programmers, designers, investors, and other individuals involved with starting new ventures.

500 Startups, http://500.co/about/ , provides up to $250K in seed funding and provides hundreds of experienced startup mentors.  Strategies are designed for customer acquisition.

Y Combinator, http://www.ycombinator.com/,  is designed to run in two three-month funding cycles a year. The entrepreneur must move to San Francisco Bay Area for the entire cycle.  Y Combinator works intensively with the start-up.  At the end of the cycle the start-up presents a demo to a room full of investors.  

Crowd funding websites allow investors with as little as five dollars to invest in businesses. Other websites require the investors to make at least 200K per year just have an extra million dollars. Crowd funding can be peer funding website where friends can invest to simply help a friend.  Entrepreneurs post their business or project ideas and investors pledge money.  Often, these websites require a fee to join in order to pay for the maintenance of the site.  This is my favorite type of platform which allows everyone to be an investor.

Peerbacker, http://peerbackers.com/,pledges are considered donations.  Entrepreneurs are required to reach 80% of their funding goals before they get the money. The website serves start-ups   and growing businesses. 

Kickstarter, http://www.kickstarter.com/, funds projects not businesses; but, still deserves mention at this point. Projects include everything from films, games, to design and technology. The entrepreneur has to achieve 100% of their funding goals to receive the money.

In these funding groups, the funds are only collected from the investors’ credit card, or pay pal accounts if the goals are met. If the entrepreneur fails, there will be no charges.

Copyright© December 10, 2012 Jackson Educational Services LLC.