America, the Capital of Entrepreneurship

America loves an entrepreneur! If you've got a good idea and a solid business model, I would say that the United States is the easiest place in the world to secure funding for a new enterprise. While you might already be familiar with the vibrant venture capital and angel investment communities, there are several more innovative strategies that could help you get that idea off the ground. These unique infrastructures are as American as apple pie or driving a Toyota (Google it).

Crowdfund That Dream

In the last decade, rewards-based crowdfunding platforms like Kickstarter and Indiegogo have been a godsend to budding entrepreneurs. Let's say you have an idea for the proverbial "Better Mousetrap" -- you tinkered with a 9-volt battery, a paper towel roll and some peanut butter, and invented an amazing new way to trap mice. You draw up a cool design, potentially even mock up a prototype, and show it to a contract manufacturing company that offers to make 5,000 of them for $20,000. How do you get enough money to press "go"? Even if you have the money, why would you put your life savings on the line for a product that you're not even sure will sell? These crowdfunding platforms fill that void. You make a video demonstrating your contraption, post it on a crowdfunding site, and interested people start buying your virtual product with real cash. Within a month, you have sold 2,000 of these mousetraps for $20 each. You now have $40,000 to make your product and ship it to your buyers, with enough inventory and profit to sell to future customers. Voila: You are in business!

A more recent and lesser-known addition to this field is Equity Crowdfunding. Unlike Kickstarter and Indiegogo, where you pay money and receive a reward, Equity Crowdfunding allows investors to actually buy into the business. This means that, if the Better Mousetrap ends up making a fortune, early adopters can share in the growing valuation of the business. Before 2015, only accredited investors could invest in private companies this way. But, now, nearly anyone can become an investor!

Regulation Crowdfunding (known as Title III of the JOBS act) could be considered an "extended family and friends" round. It creates the platform that makes it easy for people wanting to invest a small sum to do so, and allows issuers to raise up to $1 million. This just launched in May this year, so it's still very new but certainly something to consider if you have a network that you can tap into or a customer base that you can communicate this offering to. At this stage, the requirements are minimal so it can be a relatively quick and simple process to get set up and launched, just having to file a Form C with the SEC.

Buy a Business With Help From Uncle Sam

Buy a business and let the seller and Uncle Sam give you all the money you need. America is full of entrepreneurs. Just look down any main street at all the local stores, restaurants and services. Every city has thousands. These businesses are bought and sold through business brokers. I suggest you find something you are interested in owning and running (food service, salon, convenience store) and meet with brokers about purchasing a successful business from someone who is retiring or relocating. Most of these businesses sell for a multiple of their profits and, in most cases, there are dozens for sale at around 3 times their annual profit. For example, suppose that café you always wanted to run makes $150,000 of profit (be sure you are not including the owner's salary in the profit because you will have to run it and take a salary as well). So you agree to buy the business for $450,000 -- but now what? Don't worry that you don't have $450,000, because you live in America, a country that loves entrepreneurs and practically owns that word we stole from the French. The U.S. government wants America to continue to be a leader in small business and they will help you buy that café by guaranteeing an SBA loan.

Here's how the deal goes down: You offer to buy the café for $350,000 in cash (thanks to the US Small Business Association) and a $150,000 seller earnout. This means that you pay $350,000 upfront and then $50,000 each year the café makes $150,000 in profits (if it makes $130,000 the first year, you pay the seller just $20,000). If the seller, who has run this business for years and is confident it will make what they have confirmed it will, then they should be happy to make an extra $50,000 over three years and have a vested interest in your success. The SBA will guarantee up to 85 percent of loans up to $150,000 and 75 percent on higher loans under the basic 7a loan program (more under other programs) as long as your business is defined as small, for-profit, you can prove your need for the loan, have a decent credit history, and are willing to put down at least 15-25 percent. In this case, they will count the seller's earnout, so they are lending 70 percent of purchase price. Although not every seller is willing to do an earnout or offer other forms of seller financing, there are thousands of businesses for sale and many sellers who will work with you to buy their business.

Join the Online Economy

Maybe you have worked in an industry for years and want to use your industry contacts to become a distributor yourself. You know that there are better ways to get products to customers directly or, perhaps, you want to bring a niche product to market and fill a gap you've identified. Why not buy wholesale and put up a direct-to-consumer store on Amazon, eBay, or Etsy? I see people doing this all the time. Someone works in the auto parts industry and gets laid off, goes back to their company to become a dealer and, now, have an Ebay store that sells a decent amount of products that makes them a profit of $5,000 - $10,000 per month. Not a bad business to run out of their garage while holding down a separate 9-5 job. If business picks up, you bid farewell to that day job, grab a small warehouse, hire a shipping assistant, and you're running a full-fledged business!

Now that your fundraising concerns are alleviated, all you've got to do is find that million-dollar idea! Remember: in the U.S., there is no shortage of American ingenuity. So be part of the American Dream, go grab yourself a slice of that apple pie, own your own business and drive off into the sunset. In your Camry of course.