Many with a good business idea or concept believe that, if only they had the necessary funding, they could go into business and be successful. That's only partially true. The other part is that if they really want to go into a business, they should write their idea (develop a business plan) and approach some investors. Almost a business corollary to that is that they probably should develop their business, products and operate on a small scale (in their garage) to prove their concept while approaching investors. The real question is, who to approach?

Commercial Banks, Venture Capitalists or Angel Investors

Obviously, if one's business model goes beyond a very basic level, outside funding must be sought. Normally, the entrepreneur's personal resources will typically be invested immediately, but if the business requires a real injection of capital, then friends and family are next. In some situations, a person’s family or friends may not be the ideal source of capital. Therefore, the entrepreneur is forced to consider venture capital, commercial banks or so-called angel investors.

Unless your business is already established and the funding required is for a new but related business associated with the existing enterprise, commercial banks are typically not the easiest sources of funding to obtain. That leaves you with angel investors and the venture capital community. Angel investors may be successful entrepreneurs looking for interesting investments or perhaps they are connected with business associations that seek to help raise capital for new opportunities. In any event, try joining networking groups or associations where these types attend. The prospective entrepreneur should also look for small business grants and small business loans (through the SBA), as well.