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Finance: Moneypete's two cents worth
Here is the nail biter for entrepreneurs and investors. How will you get your money to make your business or investment happen? There are as many ways to get money as there are sands in the hourglass, but the question is, how do you find your grain of sand? If you embark on a quest to find the answer to this question you will most likely get just as many answers as the sand metaphor about your options. We think the answer to your financing lies in the immortal words of the late Winston Churchill, “Never, never, never give up!” If you have an idea for a business or investment that you know is a winner you will find the money to finance your dream.
We mentioned that there are many ways to find money. There are banks, venture capitalists, angel investors, hedge funds, hard money lenders, friends, family and more. In order to get someone to say yes to financing your venture you have persuade the lender that your idea is going to provide them with a return on investment, or that you will make enough money to pay off your loan. Venture capital firms and angel investors will want to have equity in your business. They will want a percentage of ownership in your venture. Here is Entrepreneur.com’s list of Venture capital firms. Entrepreneur's top 100 VC firms A banker will want to have confidence in your ability to pay your monthly payment and will expect you to have collateral for that loan.
Before you decide to go for financing you must make sure that you can intelligently convey your ideas to the lenders. This effort for many dreamers will be a dry and cumbersome task. It will be dry and cumbersome because it is all about numbers. Remember when you asked anyone who would listen, “Why do I have to take a math course?” “I’ll never use this stuff anyway!” Well, some people do, and they live and breathe by it. Get ready! You are going to get to put on your accounting hat. The key to getting them to show you the money is to show them a well thought out and complete business plan with financial assumptions and projections. Here is a good website to get some business plan software which will help you immensely.
Moneypete.com wants to pass along a little practical advice to those looking for the financing of a new venture. Make sure you have your systems in place and you have done your market research before you fly. If you are investing in real estate, make sure you have positive cash flow from your property after all your expenses are paid. Don’t go too fast. If you are confident about your numbers then take decided action, but make sure the numbers make sense to you too. If you are not sure about your own numbers it might make sense for you to “bootstrap” your venture. That’s when you get by with the bare minimum and finance the ship on your own until you get so far out to sea that you have to finance further growth. Many great companies have started in a garage with an idea and perspiration
