Matching Entrepreneurs With Investors

Richard Singer, CEO of RaiseCapital.com Inc., is determined to make his recently launched website the “match.com” of the business world. “Our goal is to help connect business entrepreneurs and investors and watch them walk off into the sunset together,” says Singer.

RaiseCapital.com is an online community, in which entrepreneurs pitch their business ideas and disclose their capital needs to investors. Entrepreneurs are often unable to find a sufficiently large audience that might be receptive to their projects.

But is it realistic to expect a match.com-like impact? One industry specialist is doubtful. Theo Moumtzidis, vice president of First Manhattan Consulting Group Inc. says, “Like most online marketplaces, one that tries to match investors and entrepreneurs could fail or succeed based on execution. For example, a completely unmoderated forum will collapse under its own weight while a too highly moderated forum might become less appealing and less real-time.”

RaiseCapital.com enables users to market their ventures using text descriptions, pictures and video streams, and by posting blogs. A page traffic counter allows users to see how many people viewed their pages, each of which has its own URL address.

Last month there were over 850,000 visits to the site which has around 450,000 registered members. You are not required to be a member to navigate through the site.

Singer says this is a great alternative resource to banks that require collateral for loans. “I think it is next to impossible for a startup…to get a conventional loan from a bank unless it is heavily collateralized. I think the capital markets can still thrive however. I feel the entrepreneur at times needs to become better educated on funding processes and practices.”

Moumtzidis doesn’t believe internet social networks will emerge as an effective alternative to traditional banking. “The choice between debt financing vs. equity financing is less often driven by the availability of one vs. the other and more to do with the entrepreneur attitudes and preference toward risk and reward.”