Thanks to the Internet and the advent of social networking communities, raising capital to start or grow a business has never been easier. These days, there is really no limit on how small or big an idea is, and there is a high likelihood that some outside party will be willing to fund at least a part of its development. There are opportunities to raise money from individuals, as well as sophisticated shops that specialize in funding venture capital endeavors. Below are five tips to help find that capital.

SEE: How Venture Capitalists Make Investment Choices

Create Your Business Plan
At the risk of sounding obvious, success in obtaining funding stems directly from how strong the business idea is. The best way to investigate this is to get a detailed business plan together. The basic points of a plan include a summary of the company or opportunity, industry overview and details of the strengths, weaknesses, opportunities and threats (SWOT) facing the venture, as well as a financial overview, including past performance (if available), and projections for at least the next five years.

Including this information will help in clearly presenting the plan to outside funding entities, but can also be instrumental in helping an entrepreneur further define the opportunity and make important tweaks as he or she moves along the path of growing the company.

Take Advantage of Online Networking
The Internet is proving instrumental in helping small and start-up businesses gain access to capital. The advent of social media platforms, including LinkedIn, Facebook and Twitter, provide opportunities for entrepreneurs and business professionals to learn about each other. For instance, LinkedIn has a number of networks for firms seeking venture capital funding and want to learn about companies that may provide it. Other sites, such as Second Market, provide platforms to trade ownership stakes in private firms, though many of these firms are already established by then and are seeking secondary rounds of capital.

Consider Crowdfunding
An important subset of the online community is the recent advent of crowdfunding. There are dozens of websites that seek to connect individuals with entrepreneurs looking for capital. Kickstarter.com has turned out to be one of the more popular sites and is very appealing for start-up firms, as individuals effectively donate funds in exchange for company merchandise and bragging rights if they help fund a firm that ends up becoming quite successful. Other sites might place individuals seeking an ownership stake, but this is to be expected for any start-up looking for sources of outside funding.

Raise Less Than $1 Million
Investing in private and start-up companies usually requires that investors be wealthy. This is meant to help ensure that they can risk losing their money, because the failure rate for venture capital is very high. The recently enacted JOBS act has loosened these requirements and has made it possible for companies looking for less than $1 million in total capital to raise funds from investors that don't qualify as accredited, or wealthy, investors. These requirements vary by state, making it important to verify local regulations.

SEE: Valuing Startup Ventures

Go Directly to the VC Community
Of course, entrepreneurs who have developed a solid business plan and believe that their idea requires millions in capital from savvy venture capital investors, may want to solicit their advice directly. This can stem from sending them a business plan, or getting in front of local VC organizations where the idea can be presented to a group of professional investors. The hit rates are quite low by taking this approach, but gaining the interest of any of these shops could easily make the difference between success and failure. By again taking advantage of the Internet, local and national VC firms can be easily located.

SEE: Seek An Adventure In Venture Capital

The Bottom Line
These days, and thanks in good part to the Internet and social media sites, a company can raise thousands of dollars to many millions to get a company off the ground or obtain capital to help it grow. Any outside investor is going to require regular updates and the larger, more sophisticated shops may even require a direct say in making company decisions, but the potential upside could far outweigh the additional responsibilities that come with taking in outside investors.

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