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Tuesday, February 19, 2008

Small Business Venture Capital in Alabama

One of the things that I get a lot of questions about from clients and other professionals is "how to best fund a startup?"

This is a tricky question because in reality it depends very much on the specifics of the business. Some businesses are definitely easier to get funded than others. Typically, high growth potential companies with existing or potential intellectual property are easier to help get traditional venture capital funding, especially if they have a strong managment team. However, many other companies can get needed funding, but they may have to search and be patient.

The reality is that Birmingham in 2008 is not 2000 silicon valley, with VC money for any dot com startup that has a domain name. Today's startup companies are going to have to show three big things: (1) that the product or service is marketable (cheaper, better, faster), (2) that the company has near term earnings and growth potential, and (3) that the management/ownership group has the expertise to pull it off.

If a new company can show those things then the chances are good that there will be funding available, but it still won't be easy. Many of the VC groups have varying needs for investment vehicles and some have hardcore industry preferences, so entrepreneurs are most likely still going to have to kiss a few frogs before they find a match, even with a great idea.

See examples -

Advantage Capital Partners
Arlington Partners
Bonaventure Capital
Castlebridge Technologies Inc.
Founders Investment Banking
Greer Capital Advisors, LLC
Harbert Management Corporation
Hickory Venture Group
New Capital Partners
Porter Capital Corporation
Porter, White & Company
Pretium Capital Group
REDMONT Venture Partners
Southeastern Technology Fund
Southern Development Council, Inc. (SDC)
Stonehenge Capital Company, LLC
Tullis-Dickerson & Co., Inc.
Vulcan Medical Ventures
Waveland Ventures

Of course, there are other ways to fund a startup, but that is another post for another day.

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