PERKSTART News & Views: Chasing the Elusive Startup Capital

Venture capitalists would normally fund startups with radically innovative ideas that will potentially grow to at least one million dollars in sales in less than six months. So if you just want to open another restaurant, salon, toy store or gift shop, forget about those shark investors. What you need is a large network of supportive relatives, friends, neighbors and colleagues.

Startup capital is the second funding stage for a newly opened business. Also known as working capital, it is the cash that will help you pay for equipment, rent, supplies, etc., for the first year or so of operation. The initial funding stage is called seed capital - the money you need to do your initial research and planning for your business. At this starting point, you would normally use your own resources to get your business organized and registered.

How much startup capital you raise will determine how fast your business will grow or if it will even take off because timing is critical especially if you’re operating in a very competitive industry. This is why research and planning are prerequisites to every venture with high potential risks. Part of your overall business strategy is to figure out your funding source. And, unless you are sure about how much you need to make your business profitable, do not even attempt to start sooner then you should.

Most first-time business owners have inadequate resources and can’t get approved for bank loans due to their low credit score. This is why those who have been planning to start their own business couldn’t do so for many years because they are having a hard time getting out of a bad financial situation. Because getting enough startup capital is the biggest hurdle aspiring entrepreneurs have to deal with in order to move forward, PerkStart has developed programs to address this problem at its earliest stage. These programs will help prepare potential business owners plan their strategy for funding, marketing and expanding.

PerkStart is a 501(c)(3) California nonprofit corporation which aims to create opportunities for aspiring young entrepreneurs through training, mentoring and apprenticeship by partnering with existing businesses and starting new businesses. By teaching our youth the essential entrepreneurial skills, PerkStart is also equipping them with life skills they can use even if they choose to get employed. Our youth deserves an entrepreneurship program that goes beyond the classroom and gives them real world experience on how to actually run a business.

(By ROWENA PEŇALBA, Executive Director of PerkStart)