Finding money to grow your company is as critical to the success
of your business as securing customers. But it's probably 10
times more difficult.
The stumbling block is figuring out where to get it. Banks?
Venture capitalists? Selling stock? Or something else? Business
pundits agree—debt is not the best way to grow a
business. Unfortunately, many businesses won't achieve growth
that attracts venture capitalists, and angel investors may not
provide enough. So who's left?
How about a Fortune 1000 company? Many corporations invest time
and money developing partnerships with other businesses that can
add value to their own. According to Venture
Economics, a Newark, New Jersey, private equity research firm,
there are 117 active corporate venture programs (including actual
funds) in the United States. These corporate investors range from
highly focused technology investors, like CMGI and Safeguard, to
actual funds like Mustang Ventures, the venture-capital group of
Siemens Information and Communication Networks Inc.
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Wayne, Pennsylvania-based Safeguard, for one, is looking for
"companies in e-communications or e-business," explains
Steve Andriole, senior vice president and chief technology officer.
"Then we ask general questions about market size and
trajectory."
For the more than $1 billion Siemens Mustang Ventures fund, the
goal is threefold, says Vernon J. Stevenson, vice president of
Santa Clara, California-based Siemens
Information and Communication Networks. "We want to find
innovative technology through hot start-ups. Second, and similar to
any venture capitalist or firm, is achieving a nice return; and the
last goal is to be a mechanism for internal business
units—for ideas from employees that can spin off into
start-ups."
How do you locate corporate investors? According to Stevenson,
try a company's Web site. Look for offices of business
development, corporate or strategic planning, or strategic or
corporate alliances. Also, try the "contact us" section
of the site or simply call them directly.
Another good strategy: Meet with corporate investors at
conferences that bring investors and entrepreneurs together. The
IC2 Corporate Investment & Strategic Alliance Conference is a
good start. It's slated for October 31 in Dallas. For details,
visit www.ic2.org/CISA.
Always remember that demonstrating how you add value to the
bottom line will lead to success.
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