How to Raise Money to Start a Business in Texas

Texas businesses need money for overhead, inventory and growth.

Raising money to start a business in Texas can be a task as large as the state itself. There are many sources of capital available to you in Texas, but securing the capital necessary to make your business venture come to fruition takes immense training and focus. Learn everything about your business and your product before asking others to invest their time and money into your Texas company.

Instructions

1. Create a business plan and proposal to pitch to potential investors. If people are going to give you money for your Texas business, they will need to know that you have a clear strategy for success. A well-developed business plan shows that you have thought the operation out and are planning ahead. Describe the industry in which your business will inhabit, the type of product you will offer, the location for your company, your growth strategy, your background and a clear timetable for important opening goals. Make a few copies of your proposal so potential investors can take it with them.

2. Ask your friends and family if they would be willing to offer startup capital for your new Texas business. You must decide if your family will own a percentage of your business or if you will pay their investment back once your business turns a profit. Friends and family will be more likely to contribute capital if they believe they will get their money back.

3. Visit a bank and inquire about small business loans. Most banks offer small business loans that are paid off after a few years for lower interest rates. Bank loans should only be a part of your overall business capital. Too many loans will overload your new business with debt. Shop around for the best loan rates. Do not be afraid to negotiate with banking representatives for a lower interest rate or more favorable terms.

4. Contact venture capitalists in your area to acquire more startup capital. Venture capitalists are individuals or entities that specialize in risky business propositions. Venture capitalists will require a partial stake in your company for the money that they invest. The percentage will vary depending on the amount of capital. You and a venture capitalist will negotiate the terms for the capital so that you and the venture capitalist are satisfied. You can find a partial list of Texas venture capitalists in the Resources section of this article.

References

• Survival Insight: How to Raise Money for Business Start-Up

Resources

• Texas Venture Capital Association