Entrepreneurs typically use their own savings and credit to fund the start-up's first steps, which might include travel costs related to interviewing potential partners and buying computer hardware and office equipment. Credit cards are the easiest form of financing at this stage, Segal said. It's not worth the headaches in dealing with relatives. Two other types of investors are angels and venture capitalists. Angels look for good financial returns but also take pride in bringing a business into the marketplace, Segal said.
Angels are difficult to find.
In exchange for its services, Sloan asks for an equity portion of the start-up. The portion varies, but is usually split equally among Sloan Enterprises, the angel and the start-up founder. Five of the proposals were funded in 1999, and possibly 10 could be funded this year. He eventually made hundreds of calls to contacts he had made in the Internet industry. Ultimately, about 2 percent of all calls Segal made turned into invested money, he says.