Get Ready For Some Golden Nuggets!

Get Ready For Some Golden Nuggets!

Over the next few weeks we will be presenting a series of posts on Financing Your Small Business. This information comes from many sources and years of experience, which we have boiled down into short informational pieces we are calling “The Golden Nuggets of Small Business Financing”.

We have encountered literally thousands of entrepreneurs seeking to finance their small business. There have been many successes and failures along the way.

Many of the so called “failures” learned from their mistakes and reinvented themselves, becoming stronger and wiser than before.

There are many reasons a small business many seek financing. If you are one of those people with an idea on a napkin, ready to seek fame and fortune, you may need to raise capital before you simply quit your day job and launch your business from ground zero. Among the things you may need at this point are:

A feasibility analysis to determine the viability of your idea;

Corporate organizational documents (articles, bylaws, minutes);

A summary business plan (or at least an executive summary);

A federal (and perhaps state) tax identification numbers;

A corporate bank account; and,

Local licenses (if required)

If you have already started a business by using your own cash (sometimes called bootstrapping) you may need to raise additional capital to:

Lease office space;

Purchase office equipment;

Develop a prototype of your product;

Hire a president, CEO or CFO

Design a logo to establish a branding and marketing program;

File for trademark or patent protection on intellectual property (IP; and,

Pay yourself a salary.

The list could go on and on.

A lot of information out there focuses on the narrower sense of financing through debt. We are going to address the broader sense of the term to cover both debt and equity. You can finance by borrowing, selling a part of the company or a combination of both.

We are going to provide you with a variety of simple techniques and resources to increase your chances of obtaining financing. We will be sharing our experience to help you avoid some of the pitfalls that can derail your business and steal your time.

The first topic we will go over is what type of company or organization you should form in order to raise capital and the various attributes of the entities. The choices include C Corporations, S Corporations, limited liability companies (LLC’s), limited partnerships (LP’s), and sole proprietorships.

Next is drafting a business plan for your company, including the various parts and the part most investors always read and some of the mistakes.

Equity Financing is after that, followed by debt financing. It is important that you understand Securities law, as this is how most emerging companies raise their initial capital. We then give you some alternatives in Licensing and Franchising as well as Friends, Angels and Venture Capital Sources.

When you are pitching your company before potential investors, you need certain skills to effectively present your case and obtain the funding. We will show you the mechanics of a good presentation, the use of presentation software and tips for speakers.

We will discuss the elements of corporate record keeping and selected issues of corporate governance. Next we go over guidelines for choosing your professional advisers. Compliance with securities laws can trap the unwary. Thoughtful entrepreneurs are well-advised to choose competent professionals to help them navigate the law and lore of this legal specialty.

Finally we will give you some of our favorite reference sources for further study!

Get Ready – and see you Next time on the Angel Network Blog.

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