How do you raise money for a business venture?

[John B]

My question is how do you raise money for a business venture without the other investors taking your idea and doing it on their own.
This is a large investment (500-800k) for a peice of equipment. I am a business owner already but don't have the capital to pull this off.

[obizt]

Loans and Grants!

[Johnny]

Most investors, if they are wise, would need to know what risks are involved before they lend any money. Therefore they would need to know what you propose to do with the money and what safeguards are in place.

You could have them sign a legal document that prohibits them from using your idea or divulging the idea to others. But this may be hard to enforce because they could advise others of your good ideas and you would have to prove beyond reasonable doubt that they had actually divulged the idea. VERY HARD.

If you have some collateral you could obtain a loan from a bank or other financial institution. However, you may be better off starting out small and then building up the business without having partners, investors or creditors.

Some business can be launched on just a dribble of dollars - that is, enough assured income to keep you solvent until your business can support you. These are usually service businesses: typing, dressmaking, an art service or ad agency, an online store, or almost anything that one or two people can run from a small office or even a room at home. Mail-order businesses are often started with as little as $400 to $1,000. Other types of small business need only a thousand or two to get off the ground. Even a manufacturing business can be started with $600 if it's in a basement and if it needs only hand tools or one machine. A little retail store can open its doors for not much more than the cost of its inventory and lease, plus utility deposits and the like.

As you figure your start-up costs, they may look small. But don't underestimate other needs. Ongoing costs like overhead, insurance, maybe a reserve to carry customers' charge accounts, and other expenses can grow burdensome. Many businesses go broke simply through under-capitalization.

Before you leave a full-time job and start your own business you should have enough capital or know where you can get it in order to cover your family and business expenses for at least six months and preferably a year. If you have to dip into the cash register for groceries, you're flirting with bankruptcy. Go over your bills or check stubs for the past couple of years. Add a cushion for unexpected medical expenses and car repairs. Increase the total by the anticipated inflation rate. If your existing resources equal this amount, and you know you needn't touch those resources for your business, then your family should be safe.

There is a lot more information that may assist you at the site below.

Good luck with your proposed new venture.