A: One of my favorite television shows these days is ABC’s Shark Tank. I love watching small business owners pitch their business idea in hopes of getting an infusion of cash from a business investor.
But as I watch people make their pitch I often see how little they are prepared for the questions of the investors.
So before you approach any investors for a business proposition, I hope you have done all your homework and planning. That includes researching the business and any competitors. It means having a solid business plan. It means being able to explain to investors how you will make money and what kind of return they can expect.
One place you should start to help find investing money for your business is the U.S. Small Business Administration. Although the agency does not invest directly in small business, it has set up the Small Business Investment Company program or SBIC.
This program was created to fill the gap between the availability of venture capital and the needs of small business start-ups. According to the SBA, SBICs are privately owned and managed investment funds, licensed and regulated by SBA, that use their own capital plus funds borrowed with an SBA guarantee to make equity and debt investments in qualifying small businesses.
There are more than 300 licensed SBICs in operation. Some SBICs invest in a range of industries while others invest in a particular field or industry.
You can also find a SBIC through the National Association of Small Business Investment Companies at www.nasbic.org. The SBIC has provided almost $60 billion of long-term debt and equity capital to more than 107,000 small U.S. companies, according to NASBIC.
Here’s a link to find out more information about how to tap this resource, including a directory of SBICs organized by state.