The Growing Search for Capital
Working as a consultant for new and upcoming businesses, I often hear, almost every day, really, just how annoying it is to deal with commercial banks nowadays. Just the other week I had a meeting with a business owner whose business is commercial lighting, and they’ve been building their business and increasing their companies sales for more than twelve years. His company has experienced excellent growth, has fantastic profit trends, an awesome marketing plan for this year, and has a positive cash flow.
In addition to his financials being in such a good place, his marketing and business plan are very well written and quite polished. Sadly, the most annoying thing for him (and a million other business owners), is that he can’t get his banker to call him back. He chose a banker and turned in a loan package to him, and this banker won’t even give him a simple phone call back. Ever. He is stringing this entrepreneur out and making him ponder whether or not they’ll actually come through for him by giving him the line of credit he’ll need to execute his marketing plan. Read more
Money for Startup
Alex, I’m involved with a media startup that’s at the raising capital phase. I don’t know how to go about this, so I thought I’d ask you. How do we raise money, about $250K, to get us started? Can you give me advice on how to proceed?
Alex’s Answer:
When raising capital, your mission should be to raise the entire amount needed over the period of your business plan and not only the sum needed now. Before you start looking for capital, you must already know how much capital you need to operate your business over the next three to five years. You will get this information from your plan. However, if your plan is not clear on the issue, you may need help in formulating your plan as well as raising capital. If the amount you seek is indeed 250K, then your target group will be angel investors, as the Venture Capital zone is any investment greater than a million.