I need help creating the business model for a venture capital firm that caters to small and micro-businesses. Also, I would like to know what critical factors I need to assess in running this type of business.
by RJ Johnston
Critical factors to consider when starting this type of entity are the type of entity, where you will receive capitalization, and your target market.
For a small investment or micro-loan business you need look no further then the SBA for capitalization assistance. Specifically their prospective lender section located at http://www.sba.gov/financialassistance/prospect…. There are restrictions. Most of the approved entity types are non-profit organizations; however, don’t be discouraged if this is not your path. Other programs do exist through the US Treasury department, and funding can be found at investment firms such as Goldman Sacks (http://www2.goldmansachs.com/our-firm/press/pre… ) assisting for-profit and non-profit companies alike.
Your target market is important. Recent successes include increasing access to capital for minorities, offering alternatives to payday high interest rate lending, and small business equity investments which are creating jobs in local economies. Choose your path and execute.