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The July 30 Small Business Link focused on ways small businesses can raise money when traditional financing isn't an option.

We asked two executives at small companies -- Matt Glickman, chief executive officer of Merced Systems Inc., and William Herp, president and CEO of Linear Air -- to be guest moderators on a reader forum about funding on WSJ.com. Merced turned to venture debt for financing, while Linear used a leasing arrangement to expand its air-taxi service.

We asked Messrs. Glickman and Herp to share what their experiences have taught them about raising money. Below are edited excerpts:

MR. GLICKMAN: Here are some lessons I've learned in raising capital:

• You can build a successful business -- in certain industries -- on very modest amounts of capital. In fact, it can often be helpful to have less capital to keep the company focused.
• Early-stage venture investors seem to make up their minds quickly about whether they are interested in a business. If a deal doesn't move quickly to close, it probably means the investors aren't interested, even if they don't say no explicitly.
• Think about what risk you are trying to reduce when you raise money -- product risk, team risk, market risk or something else? Investors want to know what milestone you are trying to reach.
• Be careful about taking capital at a low valuation from investors who say they are going to help you build your business. Investors can be great sounding boards and guides, but management is ultimately the one who builds the business.

MR. HERP: The most important thing I've learned raising capital for Linear Air is a lesson I've learned several times raising money in previous start-ups: The credibility of the team is paramount.

Assembling a team with demonstrated experience in each of your critical business functions is the cornerstone to giving savvy investors comfort that the risk you are asking them to take is worth taking.

KIM MANKE OF LAKELAND, FLA.: One of the most important benefits of leasing vs. owning is the use of the equipment necessary to [keep] your business current in a changing world.

Operating profits come from the use of equipment, not ownership of it. Today, the way to [expand] is by preserving your bank lines of credit and cash for operating expenses. Leasing allows valuable working capital for the day-in-and-day-out operations of business. [The writer is a consultant with a leasing company.]

MR. HERP: There are a couple of downsides to leasing equipment to consider.

First: [If, at the end of the lease, the asset is worth more on the market than what you've paid on the lease, the extra value belongs to the lessor.] The second has to do with the tax benefits of accelerated depreciation, which typically accrue to the benefit of the owner/lessor.

So if the equipment you are leasing has strong potential to hold or increase its value, or if you have a business in which tax benefits are important, owning may be better than leasing.

No matter what, when you own the assets, you are getting into the trading business, which, in my experience, is better left to specialists.