RAISING MONEY: Venture Capital vs. Business Angel Funding

Contrary to what you are seeing in the press with the credit crunch and looming recession there is simply too much money in the World at the moment; too much capital seeking too few investment opportunities. Remember the 1930s depression created more Millionaires than in any other era (ever) and now will be no different. A large amount of high net worth individuals are seeking to diversify their portfolios away from traditional investments as a defensive hedge against stock market volatility. Historically and in times of recession the two best investment classes that have outperformed traditional markets have been commodities and private equity. So if there is so much capital available in the world today, why is it so difficult to locate the capital you need?

The most probable answer to your question is that the amounts you are seeking are way too small to tempt Venture Capitalists or Hedge fund managers. After all it is relative. If a VC has tens of millions of pounds to invest into private equity why invest into 100 or 200 start-up companies? Who could possibly manage and foresee all of these investments and entrepreneurs? Its hard enough to manage one sometimes! So relatively speaking, investing in you would most-likely prove cost-prohibitive for them even though arguably they would receive more value overall.