Venture capital has many advantages for you and your business. These advantages include:
No monthly principal and interest (P&I) payments like you have with a loan are needed when you have venture capital funding.
No interest charges—the money you get is an investment, not a loan. An investment is the purchase of stock in your corporation.
No loan applications to fill out—you will usually get your money on the strength of your business plan.
No credit check—you get your money based on the quality of your business, not your credit score.
You and your business must meet certain requirements to be eligible for venture capital. These requirements are:
Your business must be organized as, and chartered as, a corporation.
Your business must be authorized by its corporate charter to issue stock; this is known as the sale of equity in your corporation.
Your business corporation must have a board of directors, as required by its charter. Your board need not be paid anything for serving your corporation. You can have a one-person board—yourself, if you wish. But most corporations have several persons on their board.
Your business must have an Employer Identification Number (EIN) issued by the Internal Revenue Service (IRS) at no cost to you. Today you can apply for and obtain your corporate EIN on the Internet at the
www.irs.gov web site.
Your business must have a legitimate reason for its ...