As the founder of James River Capital, Paul Saunders helps new businesses raise money. He founded the company in 1995 and therefore is an entrepreneur himself. It is never easy for an entrepreneur to get others to believe in his or her idea, but Saunders has some simple strategies for raising capital.
One piece of advice that Saunders has for new entrepreneurs is to use personal savings and other resources. This approach is called bootstrapping and includes borrowing money from your family and friends and using credit cards. Obviously, this is not without its risks, but you cannot expect investors to part with their hard-earned money if you and your family members do not believe in your idea enough to invest in it.
In those cases where bootstrapping is insufficient or not viable, crowdfunding is an increasingly popular option. This approach requires a substantial social media presence but can be appealing to those entrepreneurs who have the time and know-how to build that online following, especially since the money generally does not need to be paid back. There have been some wildly successful startups that used crowdfunding for funding, such as Oculus, which was purchased by Facebook for $2 billion.
Applying for a loan is another obvious choice. Although most people have heard of bank loans and SBA loans, there is also local funding available, which might be a better option for entrepreneurs with limited credit. In addition, Paul Saunders suggests trying to secure funding from an angel investor or venture capital investor if you have a very detailed business plan.
Paul Saunders holds a BA from the University of Virginia and an MBA from the University of Chicago. Before founding James River Capital, he worked in corporate finance at Warburg Paribas Becker and as a commodities specialist at AG Becker. He then moved to Kidder, Peabody, and Co., where he eventually became president of their alternative investment division, KP Futures Management Corp. In 1995, he purchased the company and re-established it as James River Capital. In addition, he and his wife Vicki head up the Saunders Family Foundation in order to manage their philanthropic efforts. Learn more: https://www.crunchbase.com/organization/james-river-capital