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    6 Replies Latest reply on Mar 13, 2009 1:02 PM by vlakh01

    I need start up funding.

    bkincaid1973 Newbie
      My business partner and I have a great company idea that WILL bring in around $2.2 million a year with an overhead around $160k based on market trends even in this economy. We have given our business plans to a handful of heavy hitters that didn't like it or us. Our start up costs are roughly around $250k for everything but the machine that is $799k but it may be financed and depreciated. I guess my question is how do we get investors involved and what kind of terms shall we expect for repayment or long term partners?
        • Re: I need start up funding.
          LUCKIEST Guide
          Need start up funding, Welcome

          If you want or need start up funding, I need to see a Business and Marketing Plan

          Talk to me, LUCKIEST
          1 of 1 people found this helpful
            • Re: I need start up funding.
              bkincaid1973 Newbie
              I have the business plans which also includes our marketing strategy. I am considering putting in a confidentiality agreement in it as well. Do you think that would discourage potential investors?
                • Re: I need start up funding.
                  Canadianbiz Wayfarer
                  I honestly think an agreement is understandable as some people with oney will run with an idea of someone who they know will not have funds to continue.Especially on a site like this(no disrespect to anyone,but there are scammers).People on here say they can get cash in 2 days.....that is totally bull.Anyone offering you money without seeing a business pln or even know what you are doing is scamming so I would advise putting in an agreement as I am in the same boat as you...looking for an investor.
              • Re: I need start up funding.
                bmt2008 Adventurer
                Don't take any rejection from investors personal. Most investors have particular industries that they know and like and that is usually where they put their money. Why did they not like you? Is it something(s) that you can work on or improve before you appraoch another investor?

                Keep search for other investors. One of the best way is to try to find other people these investors work with. Build a relationship with them - then, when the time is right - ask them for an introduction to the investor.

                Investor returns depend on several things - the risk - the market - the timing (especially timing to exit), etc. As a ball park - most investors would expect a return of not less than 30% annually and would seek to exit in 5 to 7 years at the most. Just keep in mind there are not many exit avenues right now other than M&A.

                Just some thoughts
                1 of 1 people found this helpful
                • Re: I need start up funding.
                  Justme009 Newbie
                  Hi,
                  just a few points I have learned. An NDA will not mean much. Watch out for the interent sites or so called brokers that blast your plan everywhere. Be very careful of fees, if any one says they have a source lined up for a fee, run the other way.

                  OK you have a marketing plan but have you done the market research to ensure that the public will by your product. Did you create the plan or is it professionally completed? Stand back and take a second look, why didn't the investors like your plan...or you both? You may need to work with friends and family, if you can't sell them how are you going to sell the investors? Really, from the investment world of business you are not asking for a lot of money...

                  IF you find an investor be prepared to give up a major part of your business, for the risk they will want a signifigant piece of the pie, you may end up as minority owners. You will need to get creative, determined and tenanciuos and more creative...prove your market, not just in your eyes

                  Network with local business groups, join the chamber of commerce, get local contacts. Get together a board of directors, unpaid, research this...in this economy you are going to have to be creative expecailly with a product that is not yet on the market. "Heavy hitters" do like to see 'skin in the game'...

                  Get ready to work, research and learn...

                   

                   


                  • Re: I need start up funding.
                    vlakh01 Wayfarer

                    Hi there,

                     


                    When it comes to start up financing your choices are Venture Capital Firms, Angel Investors, Bank (conventional lenders) and non-bank lending entities.

                     


                    Your deal is too small for VC firms who typically look for 20% or so ROI and invest in larger deals. Angel investors may work for you but times are tight and nobody wants to go too far from their money! Non-bank lenders are dead because securitization has been frozen up thus far.

                     


                    Your best bet will be regional and local banks as well as credit unions. Even some of the larger banks are beginning to lend based on our experience. The new TALF program goes into effect on 03/28/09 and so I would give it a few weeks and then start applying to names like Bank of America, M&T, PNC financial, Chase and US Bank Corp all of which are lending. Your Business Plan is very important.

                     


                    I would also dig around this excellent forum for answers and also spend some time on our website that gives tons of free resources on lending including a free bank list.

                     


                    Good luck,

                     


                    Vivek L

                     

                    http://www.smallbusinessplanresources.com/

                     

                    En Espanol

                     

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