Fatal Flaws Red flags that make potential financing sources think twice

Of the 800,000 or so new businesses that are formed each year,investment banker Robert Shuey of La Jolla Securities Corp. inDallas says only a tiny fraction successfully raise outsidecapital.

A quick look at certain benchmarks would seem to bear this out.For instance, last year there were about 700 initial publicofferings (IPOs)--a goodly number, but not when compared to thenumber of start-ups.

Then there's venture capital, a concept that gets a lot ofattention but, in reality, is not an option for the majority ofsmall companies.