Since start-up funding and growth financing for small- and medium-sized businesses has been in such short supply these past couple years, I thought posting about this CNNMoney.com / Fortune Small Business article on finding novel local investment would be a welcome change.

The article, originally published earlier in September, is about owners of several types of small businesses which opened, recovered, or expanded during the current economic crunch because local patrons were willing to invest in their favorite local businesses. Several types of money raising programs are discussed, including VIP cards/treatment for shareholders, $600 store and restaurant certificates sold for $500 (20% is a pretty good ROI), as well as “shares”.

Businesses showcased include restaurants, bookstores, pub/bar, and a fair-trade retail gift store. The focus of these financing efforts is on encouraging customers to become patrons or shareholders. And shareholders are a loyal customer base. Local shareholders feel vested in the company and want you to succeed.

Look to your customer base and your community. Including them as participants in your business and fostering a buy-local awareness could bring you that shot-in-the-arm financial boost to success.

Read the entire Love a local business? Buy a share article.

Steve Lange
Palo Alto Software

Startups can be so incredibly different, one from the other, but unfortunately we talk about them as if they’re all just startups.

It’s night and day, or apples and oranges. One person sets up a blog or a web page offering services, such as graphics, consulting or planning, and the business is born, voila! Another person gets a team together around a new business idea, and it takes establishing, developing a plan, pitch, prototype, seed funding and so on.

I’ve done a lot of work on how different a small service startup is from a product-related startup: There’s less risk but also less to gain, and usually nothing much in a service even to offer to investors. Products give you leverage, but they take a lot more risk and more money. And in this context, a website is a product, even if it offers a service.

I really liked Seth Godin’s post today, Making vs. Taking, because he gives a completely new angle on splitting things up. In this case, he’s talking about new ideas and new business vs. displacing or shaving off a piece of existing ideas. Making vs. taking is a good way to look at it.