Registering Your Venture With The Connecticut Venture Group 

Because sources of capital typically specialize in either early or late stage funding, we have categorized our services and programs into these classifications. Please click on the appropriate link below to register your funding proposal. Your responses will generate an electronic Executive Summary of your business plan. Registrants will receive professional feedback on funding proposals and will be considered by our review committee of investors for the following programs and opportunities:
 

Early Stage Companies
 

·      Exhibiting at the annual Crossroads Venture Fair (MAY), the largest business financing event in the Northeast. Past participants have raised over $2 billion in new capital.  www.Crossroads-CVG.org.  A participation fee is required.

·      Participation in the annual Angel Fair (OCTOBER)

·      Invitation to exhibit at annual Technology Commercialization Fair (DECEMBER)

·      Referral to the Angel Guild (the association of Angel Clubs and Private Investors)

·      Referral to VC firms (by matching capital requirement, industry and location)

·      Referral to participating commercial bank for debt capital

·      Recommendation to Public Investors and Lenders

o       Connecticut Innovations

o       CDA

o       DECD

·      Referral to SBIR Office for development grant assistance

·      Referral to Organizers of Industry-focused Financing Conferences and Trade Shows (Previous CVG industry events have featured Fuel Cells, Nanotech, Bioscience, Food Products, Entertainment and RFID)
 

Late Stage
 

·      Presenting and Exhibiting at the Annual Crossroads Venture Fair (MAY). With 100 companies and as many investors participating, Crossroads has grown into the largest business financing event in the Northeast. www.Crossroads-CVG.org.  A participation fee is required.

·      Referral to Member Venture Capital and Private Equity Firms

·      Eligibility for Review of Funding Strategy by CVG Late-Stage Panel

·      Admission to Advanced Late-Stage Workshop: "Roadmap to Liquidity"
 

Caveat: do not divulge trade secrets, formulas, or other specific information that could be useful to a potential competitor. Investor members of CVG will have access to your proposal. They do not need to know the soft drink formula, only that it has no calories and sales are doubling every six months...

2008 Connecticut Venture Group Funding Applications 
 

PRE-SEED and SEED STAGE Funding Application (R&D or Proof-of-Concept Phase)

Apply here if your product, technology or service requires funding for further development or testing, patent protection, or you require assistance to complete a comprehensive business plan, or other resources before you are ready to start up.

START-UP Funding Application (Ready to Launch)

Apply here if you have a business plan, a proven concept or product, a management team identified, and are ready to start up.

EARLY STAGE and EXPANSION STAGE Application (Sales < $5,000,000)

Apply here if you have started up and have annual sales under $500,000 [EARLY STAGE], or sales are over $500,000 but lest than $5,000,000 [EXPANSION STAGE].

LATE STAGE Companies (Sales > $5,000,000)

Apply here if you have annual sales of at least $5,000,000.

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Financing Basics By SBA (a primer on financing from the SBA and Inc. Magazine)  

While poor management is cited most frequently as the reason businesses fail, inadequate or ill-timed financing is a close second. Whether you're starting a business or expanding one, sufficient ready capital is essential. But it is not enough to simply have sufficient financing; knowledge and planning are required to manage it well. These qualities ensure that entrepreneurs avoid common mistakes like securing the wrong type of financing, miscalculating the amount required, or underestimating the cost of borrowing money.

Before inquiring about financing, ask yourself the following:

• Do you need more capital or can you manage existing cash flow more effectively?
• How do you define your need? Do you need money to expand or as a cushion against risk?
• How urgent is your need? You can obtain the best terms when you anticipate your needs rather than looking for money under pressure.
• How great are your risks? All businesses carry risks, and the degree of risk will affect cost and available financing alternatives.
• In what state of development is the business? Needs are most critical during transitional stages.
• For what purposes will the capital be used? Any lender will require that capital be requested for very specific needs.
• What is the state of your industry? Depressed, stable, or growth conditions require different approaches to money needs and sources. Businesses that prosper while others are in decline will often receive better funding terms.
• Is your business seasonal or cyclical? Seasonal needs for financing generally are short term. Loans advanced for cyclical industries such as construction are designed to support a business through depressed periods.
• How strong is your management team? Management is the most important element assessed by money sources.
• Perhaps most importantly, how does your need for financing mesh with your business plan? If you don't have a business plan, make writing one your first priority. All capital sources will want to see your for the start-up and growth of your business.
   

Not All Money Is the Same There are two types of financing: equity and debt financing. When looking for money, you must consider your company's debt-to-equity ratio - the relation between dollars you've borrowed and dollars you've invested in your business. The more money owners have invested in their business, the easier it is to attract financing.
 

If your firm has a high ratio of equity to debt, you should probably seek debt financing. However, if your company has a high proportion of debt to equity, experts advise that you should increase your ownership capital (equity investment) for additional funds. That way you won't be over-leveraged to the point of jeopardizing your company's survival.

Equity Financing

Most small or growth-stage businesses use limited equity financing. As with debt financing, additional equity often comes from non-professional investors such as friends, relatives, employees, customers, or industry colleagues. However, the most common source of professional equity funding comes from venture capitalists. These are institutional risk takers and may be groups of wealthy individuals, government-assisted sources, or major financial institutions. Most specialize in one or a few closely related industries.

Venture capitalists are often seen as deep-pocketed financial gurus looking for start-ups in which to invest their money, but they most often prefer three-to-five-year old companies with the potential to become major regional or national concerns and return higher-than-average profits to their shareholders. Venture capitalists may scrutinize thousands of potential investments annually, but only invest in a handful. The possibility of a public stock offering is critical to venture capitalists. Quality management, a competitive or innovative advantage, and industry growth are also major concerns.
 

Different venture capitalists have different approaches to management of the business in which they invest. They generally prefer to influence a business passively, but will react when a business does not perform as expected and may insist on changes in management or strategy. Relinquishing some of the decision-making and some of the potential for profits are the main disadvantages of equity financing.

You may contact these investors directly, although they typically make their investments through referrals. The SBA also licenses Small Business Investment Companies (SBICs) and Minority Enterprise Small Business Investment companies (MSBIs), which offer equity financing. Apple Computer, Federal Express and Nike Shoes received financing from SBICs at critical stages of their growth.

Additional Reading
Raising Money through Equity Investments - Inc. Magazine

Debt Financing

There are many sources for debt financing: banks, savings and loans, commercial finance companies, and the U.S. Small Business Administration (SBA) are the most common. State and local governments have developed many programs in recent years to encourage the growth of small businesses in recognition of their positive effects on the economy. Family members, friends, and former associates are all potential sources, especially when capital requirements are smaller.

Traditionally, banks have been the major source of small business funding. Their principal role has been as a short-term lender offering demand loans, seasonal lines of credit, and single-purpose loans for machinery and equipment. Banks generally have been reluctant to offer long-term loans to small firms.

In addition to equity considerations, lenders commonly require the borrower's personal guarantees in case of default. This ensures that the borrower has a sufficient personal interest at stake to give paramount attention to the business. For most borrowers this is a burden, but also a necessity.

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