1. Experts say that entrepreneurs who need between $100,000 and $3 million often face the greatest obstacles when raising capital for their businesses. Why?

2. How should Kevin Semcken raise the $1.5 million in capital that Able Planet needs? Be sure to consider sources of both debt and equity financing.

3. Write a short memo to Kevin Semcken explaining what he should do before he approaches potential lenders and investors to maximize his chances of getting the capital that Able Planet needs.

Venture capitalist Kevin Semcken discovered Able Planet, a small startup in Wheat Ridge, Colorado, that produces headphones with an imbedded magnetic coil to enhance sound quality,

at a technology conference in Denver, Colorado. Semcken, who suffers from a hearing loss in one ear, was intrigued and tested the small company’s product by listening to Dean Martin’s “You’re Nobody ’Til Somebody Loves You.” “I was instantly a fan,” he says. Semcken invested in Able Planet and soon became the company’s CEO and chairman. Two years later, the company’s unique noise-cancelling Linx headphones won an award for innovation at the Consumer Electronics Show, and orders began pouring in. In no time, the company’s annual revenue reached $2 million.