Michael Cole, VP of the Technology Innovation Group at Bank of Ann Arbor provides our first overview of bank financing in our series on Financing Innovation. In considering banks, it is important to remember that each one is unique. They specialize in different types of business and therefore are more likely to make loans to some businesses than others. That said, bank financing is a more risk averse form of financing, focusing on assuring adequate collateral to cover a loan in case of default. Highlights include:

• Bank of Ann Arbor provides loans to early stage companies and also has products for equity financing targeted and angel investors and venture capitalists.
• Bank of Ann Arbor finances working capital at the rate of 80% of a company's receivables. In case of default, a receivable is much harder to recover than an asset like a building or a piece of machinery.
• In all loans, the bank's primary concern is how it will be repaid. It looks first to the strength of the cash flows and the business. Next it looks to assets that the company holds. Finally it looks

9thX.com kicks off our Network Businesses series. For our purposes, Network Businesses are those that exploit unique features of the Internet in their business model. Often these businesses have a unique information asset that they are able to charge for. Further, they then exploit the network to make that asset even more valuable. This model lies at the heart of major upheaval in many industries.

As explained by John Bonaccorso, 9thX.com's CEO, the 9thX.com allows people to buy and sell digital media. They are an "end-to-end" solution that allows content producers and distributors to sell their content and receive royalty payments each time the content is resold. Some highlights from this conversation:

• 9thX.com allows content producers to be paid directly for their work. Most niche content producers have too small a market for an advertising revenue model to work.
• 9thX.com spends no money on marketing. All marketing is done by word of mouth through the web site and distributors.
• 9thX.com makes its money by controlling the digital rights management system that makes royalty-based payments possible. Each time an asset is purchased or resold, 9thX.com gets 5%.
• 9thX.com's computing infrastructure is supplied by Amazon's EC2 and S3 services.

This weekend will mark the inaugural running of the Detroit-Windsor International Film Festival. As with many non-profit undertakings, organizing the festival has been an exercise in building a network of participants and contributors. Scott Dunham, the festival manager, provides the highlights of getting this year's festival together:

• From the beginning, the commitment was to develop the festival with "Detroit style" using resources from Michigan and Windsor. The organizing committee specifically ruled out using one of the canned approaches available for purchase so as to maximize the contribution from local Michigan groups.
• Significant contributions have come from two academic institutions whose missions coincide with the goals of the festival: Wayne State University and the College for Creative Studies.
• Windsor has provided an important link into the Canadian film industry and into the Toronto Film Festival, a major North American festival.
• While the festival has been a coalition effort, John Kelly's leadership as festival director has been the glue that holds it together.

We continue our series on financing your innovation in this interview with Sharon McRill, founder of The Betty Brigade. The Betty Brigade is a full service concierge service that will come to you to help you with everday chores and organizing tasks. It has been in existence for five years and is growing at a rate of 40%.

Many might wonder where people get the money to start a business. The financial barrier to entry in service businesses can be quite low. The Betty Brigade is one such business, and Sharon lays out the challenges she faced and how she overcame them:

• Sharon had not planned to start a business, but inspired by an episode of Oprah, she decided to invest a recent $10,000 severance package in her business.
• Needless to say, the Betty Brigade, like many services start ups, did not require much initial investment. Sharon bought a computer, a copier, and a phone.
• Working capital, the amount of money you need to keep your day to day operations running, can be a significant issue when a business first starts. Sharon received payment immediately upon rendering service, reducing the need for working capital. She now manages working capital by taking money up front for large jobs.
• Another issue is financing growth. In the early years, Sharon eschewed outside financing because she wanted to maintain control. One way she financed growth was to presell business for a year. Customers made a large up front payment that Sharon could use to finance necessary purchases for growth.

Sharon is no longer seeking to finance growth purely from internal cash flows and is currently pursuing external financing. In future segments, we will discuss her efforts and progress on this front.