Perhaps lost in all of the General Motors fallout is an announcement from Prudential Financial (NYSE: PRU) that it will not take any cash from the government's financial rescue program. Instead, the firm will raise $1.25 billion on its own by offering common stock.

Last month, Prudential and five other major insurers were given permission by the Treasury Department to use some TARP funds, but PRU has decided not to participate, joining the decision by Allstate and Ameriprise, which were among the other five banks.

Days ahead of the release of the bank stress test results, reports have surfaced that Citigroup (NYSE: C) may attempt to raise capital from private investors rather than take more U.S. bailout funds. Such a move could strengthen the firm's equity without giving the government more control.

Although the results of the test haven't been released, it is widely known that Citigroup is considered one of the banks that will need to raise cash to continue (some reports state more than $10 billion).

Like many others, a friend of mine is having troubles with her business. And, to keep going, she needs an infusion of capital. However, because of the credit crunch, she can't get a loan.

So what are the alternatives? Well, she is thinking of raising money from friends and family (F&F). In fact, she thinks she can get about $100,000 or so -- which is enough for her current needs.

But, of course, she's concerned about the process. What if she is late paying back the loan? What if the economy suffers for a long period of time?

Well, here are some things to consider:

Act as if you're preparing a pitch to a venture capitalist: No doubt, you can get into a lot of trouble if you get F&F funds on an informal basis. Simply put, you are vulnerable to misunderstandings.

Take Tony Seba, who started PrintNation.com. To launch the business, he raised $500,000 from his mother and brothers.

However, he pitched his deal in a professional way. For example, he put together a business plan and investor presentation (which took several months). He also assembled the necessary legal documents.

I recently talked to a business owner who was in the process of raising capital. To this end, she paid a $20,000 upfront fee to a finder (a person who brokers equity investments and loans).

The result? Nothing. The finder said that a variety of banks were not interested in the deal.

Oh, and that $20,000 fee? Unfortunately, that was non-refundable.

With the credit crunch -- and slowing economy -- entrepreneurs are certainly having trouble raising money. But, there also appears to be a rise in so-called "advance fee schemes" (this is according to a recent piece in the Wall Street Journal, which is a paid publication).

In fact, the FBI is investigating the matter (and also has some helpful resources on its website). Although it could actually be pretty tough to prove fraud. Essentially, there must be evidence that the finder had no intention of raising the capital.

I recently reviewed a business plan (for a school). It was well written and had lots of supporting financials.

The problem? It didn't have the kinds of things that investors look for. That is, when I read the one-page overview, there wasn't much talk about why investors should shell out big bucks. Instead, there was a focus on the quality of the school and the importance of education.

As should be no surprise, the plan got little momentum.

So, here were some of my recommendations:

Proof Points: What kind of traction does the business have? Are there more customers? Revenue growth? New partnerships?

Basically, show evidence of growth – using a variety of metrics. For example, in the case of the school, there was an investment in advertising, which produced strong growth in student enrollment. Clearly, the school has formulated useful marketing strategies.

De-Risk: Investors also want to limit their downside. In other words, what kinds of things protect your business? Is the customer churn rate low? Do you have patents? Long-term contracts?

I also look for owners who have committed their own money to the venture. This shows "skin in the game."

Strong business model: Investors like to see multiple revenue streams. It shows that the business model is powerful and, more important, there are opportunities for growth.

So, in the school example, some of the new revenue stream possibilities included: dorm fees, book and yearbook fees, technology usage fees and application fees.

Helpful Resources: Checking out the web, you can find some real-life examples of good investor overviews.

One approach is to check out IPOHome.com, which has recently filed IPOs (that is, companies raising capital). If you find a company that is in your sector, you can then click to the prospectus. In it, you'll get an executive summary, which can be a great reference point.