Fellow members, please help.
04-09-2001, 10:32 PM
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I've come to sort of a crossroad with my little company here. On one hand I enjoy very much the R&D and making the stuff for our beloved car, but on the other hand I want now, more than ever for this little company to have a fighting chance of survival. I remember somewhere that most small companies fail within the first 2 years, and I've just passed my 6 months mark, and I'm facing a dilema I hope some of the older and wiser members can help.
I have teamed up with TimS2K for West/East coast ops, but we're both pretty saturated with work, and though I have an intern who may be able to help, I don't know how much help he can provide. Right now, the majority of the work I wish to offload are:
1. Final product finish - pedal hand polishing, prep, etc.
2. Packaging - various product shipment packaging.
3. Shipping - UPS or USPS shipping.
4. Website development - My website's been stuck in its current form for a while, and I need to update it.
The intern can only help so much, so I thought about hiring somebody, but of course that requires A LOT of money, and that's something my little company is lacking...
According to my accounting professor, there are only two ways a company can raise capital: Issue debt or issue equity. I don't think I can sell bonds (
), and all the banks I went to requires that a company be in business for more than 2 years (maybe they have a good point?). I don't want to load up my credit cards when I'm prepping to buy a house later this year...
Equity: I never really thought about this, but given the current state of the economy and the general view towards dot companies...well, issuing equity is probably not the best way to go either.
So, what would be your advice?
One thing that never cease to amaze me, as I've discussed at length with some members here, is the amount of knowledge available and surprising alternatives I have never thought of to us. Perhaps there are other venues I haven't heard of, thought of, or imagined.
Thanks in advance for your time.
I have teamed up with TimS2K for West/East coast ops, but we're both pretty saturated with work, and though I have an intern who may be able to help, I don't know how much help he can provide. Right now, the majority of the work I wish to offload are:
1. Final product finish - pedal hand polishing, prep, etc.
2. Packaging - various product shipment packaging.
3. Shipping - UPS or USPS shipping.
4. Website development - My website's been stuck in its current form for a while, and I need to update it.
The intern can only help so much, so I thought about hiring somebody, but of course that requires A LOT of money, and that's something my little company is lacking...
According to my accounting professor, there are only two ways a company can raise capital: Issue debt or issue equity. I don't think I can sell bonds (
), and all the banks I went to requires that a company be in business for more than 2 years (maybe they have a good point?). I don't want to load up my credit cards when I'm prepping to buy a house later this year...Equity: I never really thought about this, but given the current state of the economy and the general view towards dot companies...well, issuing equity is probably not the best way to go either.
So, what would be your advice?
One thing that never cease to amaze me, as I've discussed at length with some members here, is the amount of knowledge available and surprising alternatives I have never thought of to us. Perhaps there are other venues I haven't heard of, thought of, or imagined.Thanks in advance for your time.
04-09-2001, 11:02 PM
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I'd look into Small Business Loans. Probably the most realistic.
Private equity funding is, in fact, probably out in the traditional sense. What I mean is that the vast majority of traditional Private Equity investing is done in order to receive a return on the investment (usually within 5 years). For a company to see a return it needs to experience a liquidity event (i.e. IPO or Acquisition). Honestly I don't know if the latter is realistic but I'm pretty sure the former is not.
One type of Private Equity investment that might make sense is investment of a non-institutional type (what's commonly called Angel investing). In particular, friends and family angel would be the one thing that would be considered by a lot of folks in your case.
The other option in equity would be some sort of corporate investment - but this would require some significant changes in your business plan, model and structure. What I mean is that you could reposition in order to attract corporate "investment" from either Honda or the like (would argue it as a marketing and customer support item) or from a potential acquirer like Mugen or Spoon (would argue it as a distribution and marketing item).
You could also get creative by selling what I would call "charter memberships". These would entitle the investor to profit sharing as well as product discounts and specials.
Hmmm... I'm sure there are other ideas as well but it's late...
Private equity funding is, in fact, probably out in the traditional sense. What I mean is that the vast majority of traditional Private Equity investing is done in order to receive a return on the investment (usually within 5 years). For a company to see a return it needs to experience a liquidity event (i.e. IPO or Acquisition). Honestly I don't know if the latter is realistic but I'm pretty sure the former is not.
One type of Private Equity investment that might make sense is investment of a non-institutional type (what's commonly called Angel investing). In particular, friends and family angel would be the one thing that would be considered by a lot of folks in your case.
The other option in equity would be some sort of corporate investment - but this would require some significant changes in your business plan, model and structure. What I mean is that you could reposition in order to attract corporate "investment" from either Honda or the like (would argue it as a marketing and customer support item) or from a potential acquirer like Mugen or Spoon (would argue it as a distribution and marketing item).
You could also get creative by selling what I would call "charter memberships". These would entitle the investor to profit sharing as well as product discounts and specials.
Hmmm... I'm sure there are other ideas as well but it's late...
04-10-2001, 08:11 AM
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You might look into outsourcing the shipping and warehousing of your products. I'm sure there are companies that would do this for you, but they might be expensive. You could always find some local kid and tell him you give him x% for each item he ships(this could be a short term fix?). I've researched this idea for some computer software, but it was a lot easier because the companies I looked into were going to be printing our cds as well as shipping them.
Looking at the big picture, you could always have kids. This wouldn't help you now, but you could probably get 10-15 years of good slave-labor out of them.
-boka
Looking at the big picture, you could always have kids. This wouldn't help you now, but you could probably get 10-15 years of good slave-labor out of them.
-boka
04-10-2001, 06:57 PM
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You could contact the Service Corps of Retired Executives at http://www.score.org They are a free service and basically are retired executives that got together to help small business owners stay in business. They can help you with information on SBA loans, how to expand, and be sucessful.
04-10-2001, 07:14 PM
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[QUOTE]Originally posted by Speed 2000
[B]You could contact the Service Corps of Retired Executives at http://www.score.org
[B]You could contact the Service Corps of Retired Executives at http://www.score.org
04-10-2001, 09:27 PM
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charter membership would be a hybrid angel investment model.
basically, the investors would get equity in the company and in addition would get discount product pricing plus (perhaps) some sort of special exposure to new and prototype products.
this would allow you to increase the valuation of the company when selling the equity. it would also decrease the difficulty of raising said investment as (for many investors) the return of the investment would be less interesting than the cachet combined with the discount on the products.
basically, the investors would get equity in the company and in addition would get discount product pricing plus (perhaps) some sort of special exposure to new and prototype products.
this would allow you to increase the valuation of the company when selling the equity. it would also decrease the difficulty of raising said investment as (for many investors) the return of the investment would be less interesting than the cachet combined with the discount on the products.
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04-11-2001, 08:01 AM
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Originally posted by malachi
charter membership would be a hybrid angel investment model.
basically, the investors would get equity in the company and in addition would get discount product pricing plus (perhaps) some sort of special exposure to new and prototype products.
this would allow you to increase the valuation of the company when selling the equity. it would also decrease the difficulty of raising said investment as (for many investors) the return of the investment would be less interesting than the cachet combined with the discount on the products.
charter membership would be a hybrid angel investment model.
basically, the investors would get equity in the company and in addition would get discount product pricing plus (perhaps) some sort of special exposure to new and prototype products.
this would allow you to increase the valuation of the company when selling the equity. it would also decrease the difficulty of raising said investment as (for many investors) the return of the investment would be less interesting than the cachet combined with the discount on the products.
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