Startup

So you have a great idea and you think that it will be the next big thing. This is going to bring in the riches and the glory that you deserve. But, before you quit your job and leap into the unknown there are some things that you will need to do to get things started.
Firstly, most businesses fail within the first year due to poor financial planning or discipline. So this will be first order of business. You will need to know if your business can generate enough cash to sustain yourself. This is called bootstrapping.

Secondly, if you think that your business will not be able to generate the cash so fast but will be able to do so within the first 18 months, then you will need to raise money from somewhere or someone. Often, it will be from your friends and relatives who will give you their hand. However, in some cases, you will need to raise alot more cash in order to sustain your operations for the first few years. You can then approach business angels who can invest in your business. Biz angels are usually successful business persons in some way. They may have the spare cash to invest in your business. However, before you approach them, you will have to have a business plan detailing as to how you will put their money to good use and how you will return the money with a good returns in a reasonable time frame. Business angels usually do not require any form of collateral from you.

You need to understand that when a business angel says no to you, it is not because they think that your business is lousy, but they may be averse to taking that kinda risk at that point in time. So learn how to cultivate your own pool of investors.
The other important point is that capitals seeks investments with best returns. So you are actually competing with the equity, bond, and other markets for the same money. They may consider those investment vehicles to be less risky. Really, you need to have a good measure of luck and a good business plan to raise any money.