Show Me The Money!

The Kansas Entrepreneur and Small Business Food Chain

By Steve Radley, Director, NetWork Kansas

The mission of NetWork Kansas is to promote an entrepreneurial environment throughout the State of Kansas by establishing a central portal that connects entrepreneurs and small businesses with the right resources—Expertise, Education, and Economic—when they are needed most.  

But just like in the movies, don’t we all want to know “where the money is?”  The answer to that question is an important one for the entrepreneur or small business person to understand as they determine the short- and long-term prospects for their business venture—and the potential need for funding sources. 

NetWork Kansas has begun developing a chart that provides an overview of the types of funding available to a variety of businesses—from startup, to growth, to maturity.  Entrepreneurs must assess their opportunities for funding based upon a variety of measures including:

• Type of business they are in: The type of business and its prospects for growth will determine the funding options available.  For example:  A low-technology business with limited growth potential will not qualify for angel investors. 

• Entrepreneur’s own capital investment:  Generally speaking, the entrepreneur’s own capital investment and collateral will impact their ability to raise additional capital.  (If the entrepreneur does not have capital or collateral to invest in their own venture, then it’s unlikely that outside sources such as banks or public entities will be willing to invest.)

The following chart is a guideline for entrepreneurs to review as they build their business plan and determine their funding needs.  

Bootstrap:  The entrepreneur uses out of pocket money to fund the business.

Friends & Family:  The entrepreneur seeks investments and loans from friends and family.

Banks:  The entrepreneur utilizes personal capital and guarantees to obtain business loans.

Public Capital:  The entrepreneur obtains additional loans from public resources available.  In most cases, private capital resources are also involved.  (Kansas Mainstreet, Regional foundations, certified development company loans, Local community microloans, SBA guaranteed loans, NetWork Kansas E-Community and StartUp Kansas, Kansas Department of Commerce loans)

Outside Equity:  The entrepreneur’s business venture demonstrates high growth potential in technology or biosciences and seeks equity investment.  (Individual angels/angel networks, Kansas Technology Enterprise Corporation, Kansas Biosciences Authority, private equity firms) 

Venture Capital:  The entrepreneur has utilized available resources to grow the company to a level that requires significant outside investment.  The entrepreneur seeks an outside venture capital firm to fuel growth.