How to Find Business Funding Outside Your Home Town

Top venture funds that will look at good deals across the U.S.

A few weeks ago I wrote about some strategies to expand an entrepreneur's list of venture funding targets. In response to this article, I've received a number of letters from entrepreneurs who wanted to know if it is worthwhile for them to look outside to venture funds in other cities if local funding sources already gave them the disheartening thumbs down. It's a good question.

Let me start by acknowledging the obvious. No one likes rejection, especially when it involves our best creative thinking and career-building dreams. It's easy to become discouraged when these ideas don't meet the investment grade of local investors.

Still, a negative response from an individual investor or local venture funding source doesn't have to be the last word on a company's funding future. Sometimes, funds decline new investment proposals for reasons outside of the entrepreneur's control.

For example, a venture fund that already has made investments in a certain sector, say restaurant chains, may not want to add more sector exposure to its portfolio. If the fund needs more diversity, then business plans in food or franchise are likely to get the fast no.

Venture fund managers may also be distracted by problems with existing portfolio companies, have too many deals under consideration at the moment, or simply have already invested in a company that is pursuing similar business strategies.

After taking some time to improve business plans and presentation documents, it is definitely worth it for entrepreneurs to reach out to venture funds that invest nationally or internationally. Cities that are consistently hot spots for venture funding include Seattle, San Francisco, Palo Alto, New York, Boston, Austin, Raleigh-Durham, Baltimore, Chicago, and Minneapolis.

Fortunately, there are hundreds of venture funds in the US that invest nationally and internationally. While the majority of these funds are technology oriented, most entrepreneurs are not aware of the broad range of funding options.

Here's a small sampling.

• While the Calvert Funds name is well known in the mutual fund industry, not many entrepreneurs know that Calvert sets aside money for non-publicly traded emerging growth companies too. Even better, Calvert actively allocates money for profitable, growth-oriented companies with a social mission too.
• M/C Ventures, with offices in San Francisco, London and Boston, invests like many other active venture funds in early stage and later stage communications technologies. What distinguishes this fund is it considers investments in film, music, gaming, production houses, radio stations and more.
• BEV Capital which stands for Brand Equity Ventures is a Stamford, Connecticut based venture fund that invests in early stage companies. As the firm's name implies, BEV looks at growth-oriented retail, restaurants, and e-commerce deals.
• Dallas-based, TI Venture Capital is the venture investment arm of Texas Instruments. TI invests in early stage businesses; often in close collaboration with San Francisco-based Granite Ventures. Texas Instruments also makes direct corporate investments in companies that match the company's own strategic business goals.
• Paladin Homeland Security Fund, based in Washington, D.C. provides expansion capital to defense-related and IT solutions that enhance our nation's security.
• Canada-based Chrysalix Energy invests in early to mid-stage companies in a broad range of clean energy technologies. The fund will consider solar technologies, coal, fuel cells, batter and energy storage and new materials development companies.
• Santa Monica-based Funk Ventures invests in seed and early stage wellness products and services, medical devices, recreation, clean tech and real estate.

Stubborn, yet flexible persistence. This is what I tell entrepreneurs and my students is required for entrepreneurs to overcome rejection. Entrepreneurs who don't give up and keep working to improve their strategies eventually make their way through the naysayers to reach the "glad to see you" check writers.

Do you want to find reliable investors for your business? Write to Susan at susan@takecommand.org for great funding references and tips designed especially for startup entrepreneurs, sole proprietors and fast growth companies.

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