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FUNDING RESOURCES: Venture Leasing
Venture leasing companies will provide the capital to lease equipment and software in exchange for equity or stock options and warrants for future equity. This type of leasing is for companies who can't obtain normal leases because of their credit situation.
How It Works: Venture leasing companies work the same as regular leasing companies, except they are willing to take greater risks and usually don't require a person to personally sign for a lease. Venture leasing companies are interested in reviewing the same business plan and financial statements as banks, venture capitals and investment bankers.
Preparation Expectations: The same information the company provided to an equity venture capitalist needs to be supplied to a venture leasing company.
Advantages: Venture leasing provides another source of capital to keep the business moving forward. They also see other opportunities and may be able to make introductions that can lead to new business.
Disadvantages: It is very expensive money. You will be paying a high interest rate because of the increased risk, and you will be giving up valuable equity that management maybe able to use to bring in another investor down the road.
How To Keep Them Happy: Keep them informed as you would other investors by providing monthly financial statements and reports on the company's overall progress.
Internet Address: cfol.com/lists.htm. Includes a link to a web site that has a database-listing venture leasing companies throughout the United States.