Seeking investment

If you are starting an e-business from scratch, you might need to seek investment. Here is a brief overview of the different sources of investment funding potentially, at least, available to internet start-ups:

Friends and family – This refers not only to your network of friends, family and colleagues, but also to their friends and family as well. Amazon’s founder Jeff Bezoz kick-started his company with a hefty six-figure investment from his parents in the mid 1990s. they now own 6 per cent of the company.

Angel investors – angel investors invest in new but well researched e-business ideas. They take an advisory role without making demands. They will be prepared to invest at an earlier stage than venture capitalists. To attract angel investors, you will need to have drawn up a very strong business plan and done a lot of research. Attend e-business networking events and have a look at services such as Garage (www.garage.com) that specialize in matching investors to start-ups.

Venture capitalists – usually these are big money firms that invest a substantial amount of money in an internet based business, then work closely with that business to make sure things happen. Venture capital will provide your e-business with the heist amount of finance, but in return you would probably have to give investors a 20 to 40 per cent share ant a lot of decision making power. To find out more about venture capital funding, visit the First Tuesday site (www.firsttuesday.co.uk), which is full of advice and information of future networking events.

Advice on all aspects of e-business investments can be found at www.3i.com site.