When it comes to private money (investors) it is always a loan or profit sharing and you have to have very extensive business plan. OPM (other's people money)come with very high interest rates 12-18% on loans and short terms 1-5 years, and if they want profit sharing you will be looking at 30% plus for up to 5 years...depending on how you two work it out. Many venture capitalists will want to have a say in how the business is run as well.

If you borrow from friends or family...have legal contracts made up by an attorney before money is transferred...and transfer the borrowed money into a business account...never your personal one. Be aware that having family and friends invest in your business can ruin relationships, especially if the business goes bad and they lose their money...so if possible stay away from that route.

When looking for investors, there are very strict SEC regulations that prohibit you from soliciting for investors. Example you can be arrested and fined for placing an ad in your local newspaper that says "Need investors for new business". It is illegal to do so. What you need to do is start telling everyone you know that you are starting a business. Let them know you are in the beginning phases and will have a great business plan to show potential investors soon. Any good investor/venture capitalist will know a good investment when they see...so let the word spread. Word of mouth will be powerful here. Contact local venture capitalists in your area. There are firms out there where all they do is invest in business. The money is out there and if you have a good business plan and people believe in it...the money will come.