Friday, July 06, 2012

Can we become the world leader in supporting entrepreneurs?

We get occasional letters here at Canadian Entrepreneur. Here's a question from a startup entrepreneur in B.C.:

Dear Rick:
I recently read your article, "Don't bank on getting a loan,"  which was on the Startup Canada website. I have had the same troubles trying to get financing from banks and other lenders. I was just wondering you if you had any information or recommendation on where I could go for startup financing?

I've pretty much asked every avenue I can think of, just to be let down because I don't have the 10% needed to invest. Any help is better than none.

My recent Startup Canada tour re-sensitized me to the need to do something more about enabling more financing for entrepreneurs. But in the meantime, there's not a lot of cash out there for brave startup folks without other collateral. So my response was fairly short:

Have you tried the CYBF? They offer loans (and even better, mentoring)  to entrepreneurs under 35.

If that doesn't work, you just have to keep trying. Look for local friends, neighbours and professionals who have been successful in business, and ask them to invest or loan you money. Give them a business plan and some transparency into how you're running the business.

This is the hard part. There are no easy answers, from banks or government. Your network is what counts.

Best of luck. Let me know how it goes.

I think it's time we started a national discussion about how to get more capital into small business - growth firms and startups. Is crowd-funding the answer? How can VCs and private equity step up? What's the right role for government? What other constituencies (if any) are getting this right?
Leave a comment if you have a thought on this conundrum. For high-cost, slow-to-innovate Canada is to prosper, we have to become the world leader in motivating and supporting our entrepreneurs.