Although it would be nice to think that venture capital firms were salivating to fund direct selling companies, this is not the case. First, the amount needed, which often is merely a few hundred thousand dollars is “too small potatoes” for most venture capital funds. Even the best MLM companies are often started by inexperienced business persons. Venture capital firms are not comfortable in this context.

Rather, most network marketing companies start with personal capital, investments from family and friends, and possibly, a “random” angel investor. This is not to say that development of a good business plan and pro forma is not important to asking such individuals to participate. However, it is more likely that the investment will be provided on the basis of a personal relationship and trust, along with other loyalty factors.

At a later date, if a MLM is successful, you will find investment banking firms beating a path to your door to invest. As you look at the success stories of Silpada, Herbalife, Pamper Chef, Visalus, etc., it is evident that investment groups are enamored by MLM companies with a solid track record.

Watch the video with expert MLM Attorney, Jeff Babener by CLICKING HERE.

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