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Your Business Needs Cash...Where to Begin?
"FOCUS Resources provides a great service to young companies and people with ideas for starting a business. I know I learned a good bit from the last seminar I attended. I have spent 15 years in startups working in operations – building structure to support the vision and moving it toward success. The topics you address via seminars cannot always be easily learned through on-the-job training. It is good to have seminars available to walk interested ‘students’ through topics, procedures and tasks." - Carl E. Linke, Senior Operations Executive, April 4, 2006.
Funding Options
Audio Clip: Lea Strickland on from an interview by Radio Show Host Tony Trupiano
Angels and Accredited Investors
Are you looking for an angel? Someone who will invest in your business because you have fantastic idea. It takes more than an idea; it takes a sound business model. It takes knowing how you will make money and what the return will be for investors. Angels (accredited investors) are important funding sources for your business. Before you approach a potential investor, it is important to understand:
- what they need to know
- what the financial requirements will be
- what the requirements are (regulations) related to securities transactions
- what terms you are seeking
- how much you are willing to give up in equity in return for the funds being requested
- the "in's" and "out's" of doing a deal
- the timing of making a deal
- what "due diligence" means
Venture Capital
A significant source of capital for many technology, bio-technology, pharmaceutical, and other high potential industries. These professional investor groups have significant dollars to invest and expect to be have significant impact on who is running the business (CEO, CFO, COO, and other positions) as well as board level positions to protect the interests of their fund. Venture capitalists tend to look for 3 to 5 year exits with significant returns. VC's are highly organized and skilled in the "deal". They also have rigorous monitoring and oversight once the deal is in place.
Debt
Whether it is a line of credit, an asset secured loan, a lease purchase, operating lease, note, or convertible security, the lender most often requires some guarantee of the loan. Debt is typically guaranteed by all the principals in a company (owners, officers, and company assets) for small to mid-size firms. For businesses that do not have a well-established credit history, the owners' credit history is examined for risk and capability of repayment. SBA loans and commercial loans all have guarantee requirements. Understanding the elements of borrowing before you need the funds is an important step in getting the funds. Debt is about risk and relationships. Having a realistic picture of your financial situation past, present, and future enables you to present the most attractive "package" to the lender.
Grants
Local, state, federal, and private grants are key strategic funding sources for many small businesses. Small Business Innovation Research and Small Business Technology Transfer grants (federal programs) can range from a few thousand dollars to millions of dollars to be used for proof of concept and product development. These funds do not have to be paid back as long as businesses comply with the grant funding guidelines and requirements. Failure to comply may mean more than paying the funds back with interest and penalties; it can mean civil and criminal charges. So while the funds are "free", they aren't without cost - compliance is the cost.
F.O.C.U.S. Resources provides grant applicants and recipients with guidance on the development of costs, budgets, and business systems that comply with administrative and financial guidelines.
From Finance to Strategy...to Bottom-line Results!
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