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Approaching venture capitalists or banks is the traditional way to finance your website. However, there are certain factors to be considered before you go to a bank or a VC.

Many people telephone an investment officer of a venture capital company and try to set up an appointment so they can explain their financial needs and the potential of their company. Most venture capitalists will resist such visits until after they have received the business proposal. Without the proposal, or at least a summary proposal, the venture capitalist has no idea of the details of the business. If you do meet, he is not prepared to ask intelligent questions.

The business proposal is similar to the business plan, except that it is shorter and contains fewer details. A business proposal is much like any other proposal in that it proposes something to someone. In this case, it suggests how the venture capitalist and you can both make money. It is an abbreviated business plan with an emphasis on showing an outsider how the company will succeed.

Raising finances for an Internet business has become quite difficult after the recent crash. However, scores of ventures are still getting early stage investment from venture capitalists. The paid content model will generally be regarded as a solid and stable business model and it should be possible to raise venture capital for good business ideas and well executed plans.

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