Capital sources: Venture capitalists

Private individuals and small groups of investors with excess cash and an interest in financing small business are called venture capitalists. They seldom invest in new businesses or grant outright loans. But if you own a fast-growth company with good stability and need investors, you may want to approach a venture capital firm. Your company should have significant sales and a quality business plan before you expect serious venture capitalists to get involved. Be prepared to surrender part-ownership of the business in return for money.

Every state has venture capital groups comprised of people with high cash flow situations who may be interested in your business. Venture capitalists fit almost any description. Some represent trusts and corporations, some have wealth from their own businesses and all are looking for high returns on their investment. Finding these people often involves networking with accountants, lawyers and financial brokers.

Individual investors are called "angels." Entrepreneurs looking for venture capital might try the U.S. Small Business Administration's Angel Capital Electronic Network (ACE-Net) and vfinance.com, a venture capital resource library.