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Business Plan Basics 58 Ways To Find Money For Your Business is crammed with tips, information, and help for entrepreneurs and small business owners who need money for their company.

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Finance Consultants

Finance Consultants

Sometimes called intermediaries, sometimes called money brokers, finance consultants assist corporate clients with the process of finding capital. They vary in the types of services they provide, but first and foremost they provide introductions to lenders or investors; they help open doors to sources of capital. This is important because being referred to a source of capital by someone the capital source knows often gets better results than if the entrepreneur just "cold calls" the investor or lender himself. If the intermediary has a strong relationship with the investor, meaning the investor has worked with the intermediary before and knows the intermediary brings him "good deals", it can mean your venture gets to the top of the investor's typically large stack of business plans on his desk rather than getting lost in the paper shuffle.

"Angel" investors actually make many more investments in young companies each year than the more well-known venture capital firms. But they are hard to find. There is no published directory of angel investors. An intermediary many know some angel investors personally and be able to save you the trouble and frustration of trying to find them yourself.

Besides contacts, the finance consultant often can guide the entrepreneur through the process of finding capital. The consultant is familiar with how the process works from the initial contact stage, to the term sheet stage, all the way to closing of the transaction. The consultant knows what information the investor needs to see about the company, the Business Plan type material and the financial projections. The most highly skilled finance consultants know how to present the company to the investor in a way that will generate interest in pursuing discussions with the company. With venture capitalists, this is often referred to as knowing their "sweet spot."

One of the biggest mistakes entrepreneurs make when looking for capital is contacting investors who are not suitable. Some investors do not invest in seed or early stage companies; they look for more established businesses with growing revenues and cash flow. A good intermediary knows which investors might make a good "match" for your company.

After you have engaged a finance consultant to help you, make sure you are told in advance which investors or lenders the consultant is going to contact. You want to know who is going to receive sensitive information about your company, in advance.

Intermediaries are also valuable when you reach the stage you are ready to sell your company. They know what sorts of corporate buyers are interested in companies like yours, based on your revenues and industry you are in. In order to get the best possible price for your company, the finance consultant can help you show the potential buyer how the company could grow or expand after it is purchased, thereby increasing its value.

Do you absolutely have to have an intermediary or finance consultant in order to find capital? Of course not. But they can be a valuable resource to save you time in the capital raising process. They key is finding one who is truly a finance professional, knowledgeable about the venture capital world. When making the decision to hire a finance consultant, you have to make the decision: Do I want this person representing my company to prospective investors or lenders?

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