• One of the foremost challenges of launching a new business is finding the necessary funding. Most business ventures need at least several thousand dollars' worth of start-up capital, while others need considerably more. The problems in finding this money can take many forms, from a lack of interested investors to prohibitively expensive terms.
  
  

Pitching the Idea

• Perhaps the largest challenge of finding funds for a new business comes in convincing potential investors that the business plan is solid and that they will receive their money back. All investors face a choice: invest their money in conservative assets that stand a high chance of offering a modest return--or put their money into a risky venture with the promise of larger profits. Most new businesses fall into this latter category. It can be very difficult to convince an investor that a particular good or service will sell, if the ideas are only on paper. To overcome this obstacle, offer as detailed a plan as possible, using real-world examples of similar ventures that have succeeded.
  
  

Lack of Investors

• Depending on the economy, it can often be difficult to find firms that are interested in putting their money into any new business--let alone yours. When a recession kicks in and business starts to slow down, many venture capitalists choose to hold their money and wait for the storm to clear. In such a climate, a prospective business owner can go to dozens of potential investors or lenders without getting a bite. At those moments, it can make sense to put the business on hold for a while, until the investment environment improves a bit.
  
  

Prohibitive Terms

• When seeking a loan or investment, many prospective business owners discover that they can indeed find funds--but only at prohibitively expensive terms. Unless the business owner can offer up some form of collateral, loans issued for new businesses are essentially unsecured. That means the rates will be higher, as the lender faces a higher risk of the borrower defaulting. And in many cases, investors will wish for a return on their investment that simply isn't feasible. Many potential investors demand either a guaranteed return that the business owner can't promise, or they want a time frame for repayment of their investment that wouldn't allow the company adequate time to develop a strong client base. In this case, an investor may be best off seeking a number of small donations at more generous terms.