Entrepreneurial

Are peer-to-peer loans a good small business Idea?

– Cynthia Hsu is a contributor to FindLaw’s Free Enterprise blog. FindLaw is a Thomson Reuters publication. This article originally appeared here. –

Have you tried to get funding for your small business, only to get met with denials from banks and other big lenders? Peer-to-peer loans, or person-to-person loans, are a new and rapidly growing area where businesses can get some starter funding.

If you’ve heard of microfinance, the idea behind peer-to-peer loans is fairly similar. A large network of “lenders” come together to help borrowers raise money for various purposes.

Hundreds of lenders can ban together to help raise money. Lenders can put up between $25 to $1,000, reports The Wall Street Journal.

Popular sites for peer-to-peer lending include Prosper Marketplace and Lending Club. While most of the peer-to-peer loans on the site are for lenders who are looking to reduce their credit card debt, there is a growing contingent of small business owners, frustrated with the loan process with banks, who are also turning to the site, reports The Wall Street Journal.

Notes on raising seed financing

– Chris Dixon is the co-founder of Hunch and of seed fund Founder Collective. This blog originally appeared here. The views expressed are his own. –

I recently taught a class via Skillshare (disclosure: Founder Collective is an investor) about how to raise a seed round. After a long day I wasn’t particularly looking forward to it, but it turned out to be a lot of fun and I stayed well past the scheduled end time. I think it worked well because the audience was full of people actually starting companies, and they came well prepared (they were all avid readers of tech blogs and had seemed to have done a lot of research).

I sketched some notes for the class which I’m posting below. I’ve written ad nauseum on this blog (see contents page) about venture financing so hadn’t planned to blog more on the topic. But since I wrote up these notes already, here they are.

NEA seeks seed stage deals

– Alastair Goldfisher is the Editor-in-Charge at the Venture Capital Journal, a Thomson Reuters publication. This article originally appeared on PE Hub. –

New Enterprise Associates is planning to step up its pace of early stage investments, thanks in part, no doubt, to how the plummeting costs of launching a business make smaller investments potentially more lucrative.

NEA, which last month made early stage investments in Inporia, a stealth ecommerce startup, and Grubwithus, a social dining service, has reportedly formed NEA Seed Fund to target seed stage deals.

An entrepreneur takes on LinkedIn – and Facebook

The Facebook logo is displayed on a computer screen in Brussels April 21, 2010. REUTERS/Thierry Roge

– Connie Loizos is a contributor for PE Hub, a Thomson Reuters publication. This article originally appeared here. –

Entrepreneur Rick Marini has a lot to be thankful for, including smart, connected friends who’ve supported him in the launch of two of his businesses. The most recent of these is BranchOut, which leverages Facebook to help people find business connections and that has an enviable list of backers and advisers.

Best practices for raising a VC round

An employee counts money at a foreign currency exchange in Tokyo. REUTERS/Yuriko Nakao

Chris Dixon is co-founder of Hunch and founder of Founder Collective, and an investor in many early-stage companies like Skype and Foursquare. Previously he co-founded Siteadvisor, which was acquired by McAfee. This blog originally appeared on cdixon.org. The views expressed are his own. –

Having raised a number of VC rounds personally and observed many more as an investor or friend, I’ve come to think there are a set of dominant best practices that entrepreneurs should follow.

10 questions to find the right bank for your business

– Mary Goodman and Rich Russakoff are co-founders of Bottom Line Up Enterprises. This article originally appeared on The Money Dept. column for BNET. The views expressed are their own. –

Finding the right bank for your business is not all that different from finding the right mechanic for your car, or the right surgeon for an operation. You need some objective information first.

The best way to determine whether or not to consider a particular bank is to find out the answers to the following 10 questions. Use them as your starting point, but know that you should dig deeper if you can.

Startup incubators multiplying like “mosquitoes”

– This is a Venture Capital Journal article that  appeared on PE Hub – both are Thomson Reuters publications. –

There’s no denying that an incubator rebirth is taking place, thanks in large measure to Y Combinator.

Y Combinator clones are everywhere. Several dozen of them already exist and insiders expect more than 100 such incubators will be operating nationwide before long. And they’re busy churning out plenty of startups. This past week, AngelPad held a demo day for its startups to pitch VCs, its second demo day in less than six months.

The 100 most influential VCs and angels

– Mark Boslet is a contributor to PE Hub, a Thomson Reuters publication. This article originally appeared here. –

Any list of the 100 most influential venture capitalists and angels should include the likes of John Doerr, Ron Conway and Michael Moritz, right?

Not necessarily. And not if the list you’re referring to is the “100 Most Influential VCs, Angels and Investors” compiled by Lucy Marcus, the Huffington Post columnist and the non-executive board chair of the Mobius Life Science Fund.

Pre-money valuations rose in 2010: report

– Mark Boslet is a contributor to PE Hub, a Thomson Reuters publication. This article originally appeared here. –

Deal terms and valuations shifted in favor of entrepreneurs last year as onerous term sheets became less common and money flowed more freely.

These were the findings of a study by the law firm Cooley released this week. (The data comes from transactions in which Cooley served as counsel).

VC: “Entrepreneurs have a lot of the power”

Ann Miura-Ko is known for using the term “ninja assassin” in describing the kinds of technology entrepreneurs she likes to invest in as a venture capitalist and co-founder of Silicon Valley’s Floodgate Fund. Reuters recently caught up with one of the country’s up-and-coming VCs, after Miura-Ko attended at a Washington, D.C. conference addressing financing options for small companies.

Q: You’ve said you are concerned about impending regulatory restrictions on small investment firms as the Dodd-Frank Wall Street Reform and Consumer Protection Act takes effect. Why?

A: This comes out of the result of some bad behavior on the part of investors. But what they’re (government is) trying to do is mitigate risk for the whole economy by having smaller investment firms also register with the SEC. As a small fund myself, that doesn’t have a lot of overhead, we don’t have a lot of back-office people working for us. The amount of reporting that is required relative to the amount of risk it de-risks for the entire economy, I think that the cost benefit doesn’t really make sense to me. We as a really small fund would have to start registering with the SEC pretty soon, and the amount of back-office work that would be required is kind of ridiculous.

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