Finding money from private sources is everyone’s dream but it is hard to do. Normally private sources amount to Angel Investors who have their own venture capital funds. They didn’t accumulate all that capital by being overly generous so mining companies can’t expect to millions of dollars and give up only 2 percent of the project or company. This is a very hard realization for some but remember that people with money are generally taking a risk not so much on the project as on the managers of the project and that is a sobering thought.

But it is ok to give up a majority interest in the project or company because not only is there access to the capital but also to the advice of people who know how to make money. And making money is not an easy thing to do regardless of what anyone says. So a word to the wise - show a lot of respect to people who have made money. Companies looking for venture capital are advised to listen to the offer and be prepared to negotiate but also be prepared to be reasonable in their expectations. I once negotiated with a guy who had a project that he felt was worth $500 million and could be funded for $50 million. “And how much of the project are you willing to give up in order to get the $50 million?” I asked. He leaned across the table, stared me in the eye and stage-whispered, “I’m willing to go as high as 15%!” This is an example of an unreasonable expectation.

Not only must one be prepared to give up a good slice of the project but also one had best be forthcoming with the data - the good and the bad. Some people consider it fraud to withhold important, if damaging, information on a project. So what if there is 2 million ounces of gold. If the metallurgical tests say it can’t be recovered then this information had better be on the table. And who cares if the new process technology will revolutionize the world. If the company wants someone else’s money to finance the development of the new technology they had better let them look into the black box.

Private money is generally looking for early development plays and was a favourite source of financing during the tech boom of the early 2000’s. It is often called seed capital because it gets the ball rolling until there is a good story upon which to build a public company or shake hands with the bank manager. It is almost never cheap money in terms of maintaining control but what is more important - getting the great idea developed and putting some cash in the jeans or maintaining control over a great idea?

But what about public financing?