“Cash Is There If You Look”

There’s plenty of cash out there to finance U.S. businesses, but many entrepreneurs don’t know how to find it, reports a recent study.

Though $60 billion in private equity went to new businesses in 1998, $56 billion of that amount came from family, friends and angels. Only $4 billion flowed from venture capitalists.

The study, which was conducted by Babson College and the Kauffman Center for Entrepreneurial Leadership, found that many entrepreneurs don’t investigate federal, state and local government assistance programs that can help them secure financing. For example, only 2% to 3% of entrepreneurs receive government funds from the Small Business Administration’s loan guarantee program. And most of these recipients are beyond the startup phase.

Conclusion: Many potentially lucrative businesses can’t grow or never get off the ground because their creators don’t know how to find the more than $100 billion in total private equity under management within the U.S.

Writer: Morey Stettner