Seed Capital
How to Raise Seed Capital Legally
If a company uses an unlicensed money finder to raise capital it is in violation of the Security Act of 1933.
Today you can find all sorts of experiments out there on new ways to raise money. I first heard of the personal IPO a year or two ago. Today Wired has a long article on it.
Man Who Sold His Fate to Investors at $1 a Share
On January 26, 2008, a 30-year-old part-time entrepreneur named Mike Merrill decided to sell himself on the open market. He divided himself into 100,000 shares and set an initial public offering price of $1 a share. Each share would earn a potential return on profits he made outside of his day job as a customer service rep at a small Portland, Oregon, software company. Over the next 10 days, 12 of his friends and acquaintances bought 929 shares, and Merrill ended up with a handful of extra cash. He kept the remaining 99.1 percent of himself but promised that his shares would be nonvoting: He’d let his new stockholders decide what he should do with his life.
Steps for Researching the Right Investment
Unless you’re lucky enough to have access to your own capital, starting out in business often means looking for outside investment. There are many options available – from government grants to angel investors – and it’s tempting for fledgling businesses to take whatever they’re offered. But there’s a lot to be said for researching potential sources in terms of what they want, where they’re based, and who they’ve already invested in, before you decide on your target.
If you choose not to apply for a bank loan, one of the first steps you should take is to look into grant funding. Free support is always worth a bit of research – in particular, check if there are limitations on what how the money is used, to ensure you can still go ahead with your business plan. National and regional government websites will offer more information of the type of grants and their stipulations.
