Business Capital for Non-American Companies - Finance

Business Capital for Non-American CompaniesByWilliam Cate

Finding risk capital for business expansion is not easy. There aren't hundreds of thousands of frenzied investors seeking to put their hard-earned money into your business. Unless you are willing to search for the right equity investors, you will never find them.

This is a survey of some sources and methods that might help a CFO (Chief Financial Office) of a non-American company find their company's needed capital infusion. This article is a good place to start prospecting for your company's financing.

The United StatesAmericans are provincial. Relatively few American Venture Capital or Merchant Banking firms will fund companies outside of the United States and Canada. Even fewer wealthy Americans will fund business projects outside of the United States. The one noteworthy exception is that there are American investors willing to fund projects in Israel. Lists of such American investors are available to Israeli companies.

Also, there are political limits on where Americans can invest. Cuba has proven to be a good investment for Canadian investors, but American Law precludes Americans from investing there. Also, Iran, North Korea and a few other countries are off limits to American investors.

You can get a list of American Venture Capital sources by doing an advanced search at Yahoo or Google and putting "Venture Capital Directory" in the exact phrase field. Review the Venture Capital Firm websites listed in these online Directories. Carefully read the Venture Capital Firm's funding criteria to determine if they will fund companies in your country. If the Venture Capital firm doesn't state they will fund projects in your country, don't waste your time and money trying to get them to adjust their investment criteria to fit your needs.

An American-based Merchant Bank that will fund operating companies with revenues in Asia, Africa, Latin America, Europe or the Middle East is Beowulf Investments. [/~beowulfinvestments/id40.html] Their approach is to create a Joint Venture Corporation and take that Joint Venture Company public in America. They can supply or raise between US$1 and US$5 million for your company's business expansion purposes.

EuropeWestern Europe is the second largest source of venture capital firms in the world. They have far more merchant banks than the United States. Western European wealthy investors are more inclined to invest money offshore than are their American counterparts. You can find a good starting list of European Venture Capital Firms at:/resources/venturecapital/printfiles/venturecapital_europe.htm

Asia has the third largest group of Venture Capital Firms. It has fewer Merchant Banks than America. Its wealthy investors tend to be more conservative and less willing to risk money in companies unknown to the investor. A useful starting list of Asian Venture Capital Firms can be found at:/resources/venturecapital/printfiles/venturecapital_asia_pacific.htm

Middle EastArab banks tend to act as Merchant Banks or Venture Capital firms and a review of Arab Bank websites can be very helpful. I suspect the reason for the practice is that Merchant Banking is more consistent with the Koran than is traditional Western Banking practices. A good starting site for Middle East Venture Capital Firms is:[/Arab-Venture-Capital.html] Scroll down a bit to get the information. There is blank space between the ads and the Venture Capital Firm list.

Venture Capital in AfricaAfrica has the fewest Venture Capital Firms and Merchant Banks. Wealth Africans tend to put their money into European banks. There is a list of 25 Africa Venture Capital Firms at [/news_16_2005.htm] The list is in pdf format.

Venture Capital in Latin AmericaThere are a few Venture Capital Firms in the larger Latin American countries. There are a few Merchant Banks. Wealthy individuals tend to put their money into American banks. A Useful Latin American Venture Capital Firm directory is: [/index.cfm]

ConclusionYou now have a start finding risk capital for your company located anywhere in the World. You can build on this list by doing Advanced Search at Yahoo or Google using Venture Capital, Merchant Bank and related words in your language. You can find more information in business discussion groups focused on your country or groups who communicate in your language. Join local business groups, like your Chamber of Commerce, and asked them about risk capital resources in your country. I strongly advise anyone seeking risk capital to discuss their search with their local business librarian, who often can suggest sources of information. Most countries have a business development service that publishes useful information about funding sources in your country. Do a little research and you should have a solid list of funding sources that would be potentially interested in helping your company grow.

If you represent an operating company with a sound business plan and you are offering an equity position in your company on standard equity terms, there is a very good chance that there is a source of risk capital for your company. Seek it and you'll find it.