The driving force behind this type of investor is not so much interest in your tangible assets as security, but rather an openness to innovative ideas and formulas, dazzling management techniques, imaginative products that could sell big and produce large profits fast.

Where banks and institutional lenders want hard security to back up loans, the venture capitalist uses the share he has acquired in your business as his investment vehicle - that's why this form of available business money is appropriately called "risk capital." In this sometimes chancy arrangement, your ultimate business success is the investor's only real guarantee of a return on investment.

The venture capital arena has evolved over the years into two very specific sources of funding. One is the traditional, formal organizations, which are the most commonly known source of venture capital. The other is that group of investors known as financial angels, and they actually provide a collectively greater amount of funding than the formal groups do.

Formal venture capital organizations are usually solid financial partnerships backed by high dollar funding from big institutions insurance companies, business and labor union pension funds, foundations or even the state and federal government, in cases such as Small Business Investment Companies (SBICs) or Specialized Small Business Investment Companies (SSBICs).

There are fewer than 1,000 of these institutional venture capital firms nationwide, and many are subsidiaries of banks or major corporations. Professional money managers run these operations are very carefully, for the most part, with strict fiduciary responsibilities to their funding sources, which are groups that demand capital preservation, prudent investment and big returns. You may find them almost as challenging to deal with as traditional banks and commercial lenders.

Of the $30 billion of private venture capital invested in American business each year, only about 10 percent, or $3 billion, comes from these traditional established venture capital sources. There are approximately 18 million businesses in the U.S., but only about 2,000 of them succeed each year in obtaining venture capital from such institutional investors. Of those, only about 250 are start-ups.