THERE’S NO FREE LUNCH!
ALL MONEY HAS STRINGS ATTACHED
Financing Your Start-Up Business
Debunking the Myth of “Free” Grants
[I met Fred Patterson at the National Association of Seed and Venture Funds conference in Oklahoma City last year. He’s back with another rock solid article on business financing. You can also download a PDF of this article, courtesy of Fred.]
Type of Financing
|
From Whom
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WIIFM
|
Expectations
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Amateur
|
The 3Fs: Family, Friends and Fools
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To support you personally
|
Don’t squander the money and embarrass them
|
Grant
|
Government Agency or Foundation
|
Support their Mission by helping solve a problem
|
Perform and report your best efforts
|
Debt
|
Banks (may be SBA guaranteed)
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The Interest you pay them
|
Keep current on debt servicing or forfeit your collateral
|
Equity
|
Angels or Venture Capital Investors
|
Build wealth via a significant return on their investment (ROI)
|
Take their advice whenever offered and provide that ROI
|
Grants for small business
Conclusions
Photo provided by Fred Patterson.
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Financing always causes business owners angst. If you need financing for your business, it is definitely worth a visit to your local Score office. They can help you put together materials that will give you the best chance with potential sources of financing. They really helped us.
ALWAYS avoid these three: FFF – I’ve never tried it, and I wouldn’t even think of it.
Wayne
Wayne, borrowing from friends and family is difficult, even for the most savvy business people. Always lots of potential trouble there.