I admit, I’ve succumbed to several myths about financing startups in my blog, so it was useful to read Scott Shane’s supporting information behind his Five Myths about Financing Startups that Hurt Entrepreneurs:
- Myth #1: It takes a lot of money to finance a new business
- Myth #2: Venture capitalists are a good way to go for start-up money
- Myth #3: Most business angels are rich
- Myth #4: Start-ups can’t be financed with debt
- Myth #5: Banks don’t lend money to start-ups
Calling these myths needs to come with some qualifiers. Whether it is myth or truth depends an awful lot on the business you’re going into and how much experience you have — in running any kind of business and in the type of business you are starting. To some degree it’s going to depend on the state of the economy at the time. But do read the article in full, and be heartened by the knowledge that finding financing for a startup is not impossible.