Despite the hype surrounding equity capital, very few startups raise
money from outside investors. The Census Bureau's most recent Survey of
Business Owners shows that only 2.7 percent of U.S. companies obtained
startup financing from a venture capital firm, strategic investor,
friend, or family member. Even raising external equity after the startup
stage is uncommon. Data from Angelsoft, a
provider of angel investment tracking software, reveal that only 2.8
percent of those seeking money from angel groups receive it. The share
of successful requests for venture capital is even lower. A primer
on venture capital produced by the Small Business Administration
estimates that only 0.1 percent to 0.2 percent of funding requests made
to VC firms result in an investment.
So why do so few succeed at getting others to invest in their businesses?
To read the full, original article click on this link: Why Equity Financing Eludes Startups - BusinessWeek
Author: Scott Shane
