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    5 Replies Latest reply on Feb 21, 2010 12:32 PM by phanio

    Need help with start-up

    burk04 Newbie
      How does it work when you have an investor? Someone who wants to back you business financially? Does this mean you are still sole owner, and they're pretty much just like a bank that you make payments to monthly. Every business advise tip out there says look toward friends, family ect. But they are all in the same position we all are, I don't have any rich relatives.
      Then the banks, SBA, ECT none of them will finance more then 51%, ok fine, but how do I come up with 49% when I have plenty in my 401k, but unless I quite or have a hardship I can't get it out. Nither one of those would look good to a bank for lending. I own a 250,000 home, yet I don't have enough equity. This goes on and on, I think you get the picture. Really? and our goverment, don't get me started.

      I have a great idea, I have plenty of supportive contacts, I have a 100% complete business plan. I need 150,000.00 to start-up, I currenty have 35,000 cash and credit. I need at least 50,000 from and investor, to probably be elgible for the rest in financing, or 115,000 from and investor would great, but I'm a realist and know..... on what planet is that going to happen.

      I'm not going to get discourage, I have never failed at giving 150%, and I'm not going to start now.
        • Re: Need help with start-up
          alytus Scout
          it depends on how the contract is written. sounds like you are serious about this !
          • Re: Need help with start-up
            dkbrown Newbie
            hello my name is dan

            I am interested in business development opportunities.

            Please email me

            Upon your email I will send you my phone number and we can have a discussion

            My location is Los Angeles California.

            What business do you want to grow?

            yours truly
            • Re: Need help with start-up
              EHYoung Wayfarer
              once you incorporate you are issues shared, even as a private company. Any investor would "buy" a certain amount of shares from you for their investment. If you already have contracts in place you can make the argument that the shares would of higher value to investors so you don't' have to give up that much of business.

              The other option is look for a partner who is in a protected category (woman, minority and even veterans in some states (def. for federal). I'm not sure of the ownership percent percentage they'd be required to have, but that could help grease the wheels a bit more with the SBA (i'm a veteran so they are almost nice to me). I've also had better experiences working credit unions.

              Love to chat more if you'd like and compare notes.


              • Re: Need help with start-up
                phanio Pioneer
                Investors can either provide a business equity (cash for a ownership share of the business) which would probably require you to incorporate and issues shares of stock or they can provide debt (just like a bank). Some times the debt provided is convertible to stock in which you would have to incorporate your business.

                Finding start up financing today is really hard unless you have outstanding credit, income and collateral - which it appears you are lacking.

                Some suggestions:

                Get out in your community and look for local investors. Seek out CPAs, Lawyers or other business owners - pitch your deal to them. If they don't or can't invest - they usually know the people who can and will. Most investors like to be introduced to new companies from people they know and work with.

                If you can get by with a smaller amount (or use a smaller amount to move your business to the next level so that it may be rip for investment) - you might have to cobble together the funds. There are micro loans that can provide up to $35K for new businesses and peer-to-peer lending sites that can provide up to $25K each.

                There are also unsecured, non-bank lenders that provide both business and personal loans (up to $125K) provided that you have excellent credit and some source of good income.

                Laslty, if youf needs for this funding includes other items, other than cash - like equipment or commercial real estate - seek out lenders that only provide those types of loans. 1) they would have easier underwriting requirement and 2) would know how to work with or have programs for start-ups.

                Business Money Today