GROUP ECONOMIC AND ACCESS TO CAPITAL
By TED HARVEY
In my last Group Economic and Access to Capital part five I discussed that I would give some case studies or scenarios. So that we are on the same page, scenarios are a description of what you could possibly make happen. There are three examples I will be using where and how you can get money.
- VENTURE CAPITALISTS
I had mentioned earlier several other ways to get capital, family and friends, hard money, and yourself. But your family and friends and you are tap out and you don’t want to use hard money.
There are business bankers available that relis your business and want to give you money. The question mark is dealing with business bankers you have to be vetted and qualified. If you have all your ducks in a row thousands of dollars will be available.
Networking is a lot of hard work, shaking hands, passing out business cards, and attending a lot of events. Meeting potential business investors is an art and if at all possible, deepening those relationships can turn out to a business partner. The people you meet love your idea but it’s not there market, interest or where they want to invests their money. However, that person you have met and who likes your idea and respects you as a person might know someone who might be interested in your particular business. Many times it’s not what you know but who you know.
Venture Capitalists have been a hot and exciting way to get funding for your business. Especially since President Barack Obama signed into law H.R. 3606 the JOBS Act which stand for Jumpstart Our Business Startups Act. There are seven acts which was created and intended to encourage funding of United States small businesses by easing various securities regulations. They are the following:
- Title I Reopening America capital markets to emerging growth companies.
- Title II Access to capital for job creators
- Title III CrowdFunding
- Title IV Small company capital formation
- Title V Private company flexibility and Growth
- Title VI Capital Expansion
- Title VII Outreach on changes to the law or commission
Now I can go into detail on each Title, but you have to do your own research. I will do one as an example, Equity Crowdfunding which is the process whereby people ( i.e. the crowd) invest in an early-stage unlisted company ( a company that is not listed on a stock market) in exchange for shares in that company. A shareholder has partial ownership of a company and stands to profit should the company do well. For the an example ABC Company has several very successful restaurants and they want to expand and possible franchise in other parts of the city. Title III CrowdFunding can possible help you with financing for expansion, Once you have crunched the numbers on the number of restaurants and consulted with your lawyer and accountant ABC Company then would put together a financial projection presentation on the potential profits and the return of investors or partners investments.
The JOBS Act was created just for helping startup companies and those companies that need a cash infusion for expansion. We talked about the different avenues trying to acquire capital. There are billions of dollars that’s out there, you just have to make sure all your ducks are all accounted for and your pitch is tight. Investors who have money are in the business to make more money. All you have to do is convince and prove to them you can make money for them by using their money. My suggestion is go get your capital and don’t take no for an answer. Next Article part VII Group Economic and Access to Capital Part VII the numbers game how to deal with rejections and getting to that yes.