Advice on raising capital...

[WearEco]

Hey Everyone!

I was just wondering if anyone out there has had any success raising capital with different methods other than loans.

I am working on my start-up and I am finding it difficult to raise funding considering the other expenses in my life. (new home etc...) If anyone out there can point me in the right direction so that I can figure out some new ways of raising start up capital that would be great.

Its a pretty small company that I think will do well, so the initial start up is not going to be that much. I just want to make sure that I am exploring every option.

Thanks for the advice,

-Taylor

[GuyBBY]

Taylor,

There are a few resources besides the usual bank loan approach and they include capital from family or friends, taking on a business partner, reasonable credit card debt that you are sure you can pay off, and grants/loans from the SBA.

However, these are often the most difficult/risky. Getting money from friends and family can be asking for trouble outside of the business realm, in that if things go wrong, you never want to comingle valued relationships with business misfortunes.

Taking on a partner (which would be my suggestion from all the above) is not a bad idea, however you have to realize now that in return for the money, you have to give up some of your "power" and management clout, which could be a bad thing if you simply select someone for their capital, or a good thing if you add capital AND skill with a second person to bring the company to success and lessen the work load.

Lastly, the credit card debt is ok for items you know you will be using to gain that return (i.e. a computer which will allow you to do organize your business and use software, create a website, etc) but you are not going to put an office lease on a Visa!
Also, the SBA loans and grands are not just handed out and you will need to present your case for one just as with a Bank loan.

You could try and take out a loan against the equity on your home, however I am not sure how that would work with today's market. All in all, if you can do things "on a shoestring" for now and maybe realistically push back a few pieces of the start up to align with timely ways that you can self fund them, I would consider that.

Best,

Guy

[akula]

taylor, too broad of a question
startup finance is very specialised body of knowledge
if you want specific advice, i need to know:
- your cv
- your industry
- stage of your company (seed/expansion etc)
- your fin statements

...if you just want general fund raising advice, see peter ireland at antiventurecapital.com

[pboychuk]

how much do you need? does your startup completely depend on having a set amount of money? I personally like to start with what I have and build capital from there.

[WearEco]

Thank you all for the great posts,

I am figuring that my initial start up costs will consist of probably 5,000 or under. I know this is a pretty small amount to be raised but being a YE and trying to get this thing going after just buying a house is pretty difficult.

My business is in the clothing industry, so the brunt of the money will be used for clothing purchases, printing, packaging, etc...

I am good with websites, and graphic design so I am not adding that into my budget for I will do it all myself, I am however adding in domain registration (which I already have), and domain hosting.

I am looking to start small until I know that this seed will blossum.

Thanks for the different alternatives for finding funding. Like I said I am trying to stay away from credit cards and loans, As well as family and friends. Im sure there is something else out there that I have not looked at. Any advice from any YE's that were in this position at one time would be greatly appreciated.

Thanks,

-Taylor

[GuyBBY]

Hi Taylor,

I will keep you posted on the Boston YE mtg because I am sure you can also share your thoughts and ideas and discuss in person.

guy

[CIsaac]

Taylor,

From what you've said, I would suggest going with a smaller community bank in your area that recently opened. Ask them about a business credit line that also offers check writing; or a small loan. These newly established banks sometimes have some leniency in lending guidelines because they're new.

Also, I would have a business and marketing plan in place to ensure them that you're serious. You might want to check out your state's micro loans programs also (should be through their department of development) and their SBA express loans as well. Good luck!

-Cheryl Isaac-
IBS - Isaac Business Services