Do you have access to capital?

- Everyone who starts a business needs money, and so the question becomes, where's the money going to come from? More specifically, do you have access to capital? Now, the answer to that question might depend on the type of business you're starting. If you're opening a nail salon, you'll probably have a different financial need than if you're launching a software application. For the nail salon, you'll talk to your local bank, maybe borrow from family, or draw from your own finances. For the software venture, you'll need to go through a process of what's called fundraising. Fundraising is typically required when an entrepreneur starts a company that's going to need investors from the very beginning. Round one is often called the "friends and family" round, and that's where you get loans and investment from those close to you, typically in exchange for stock. Then a "seed" round raises money from angel investors or wealthy individuals. Once the company has those funds, then the company might raise what's called a series A, where sophisticated investors put larger sums of money into the business. They might take 20 to 40% of the equity, and often change many things about the business as part of their investment. Here's the thing. Don't go starting a business unless you've done your homework on funding. Whether it's getting a loan at the bank, or borrowing from your aunt, or going out to investors, you can't expect money to fall in your lap. If you get started before knowing your financial pathway, you'll end up draining your savings, going into debt, which puts your whole venture at peril. Ask yourself where your funds are going to come from, and then get to work discovering how you can take that financial path successfully.