Fund Your Business With Seed Capital
Entrepreneurs need to look at creative ways to fund and grow their businesses, they need to find hidden sources of money.
Let’s face it, the problem many small business owners have is that they often lack money and are under-capitalized as a result.
This problem needs to be dealt with head on. One way to fund your business is by using “seed capital”, or “Other People’s Money” (OPM).
Five Types of Seed Capital
When things seem grim and the bank has turned you down for a loan, don’t sweat it – we have all been there. The reality is that you actually have five choices to investigate when it comes to acquiring seed capital to help you grow your business.
- Your day job or business income
- Your savings or retirement
- Your credit cards
- Angel investors who are friends or family
- Venture capitalists
Each of thees options has its advantages and disadvantages.
For example, day job income is money you don’t have to pay back, but savings are not something everyone has the luxury of having. Credit cards are the bank’s money, and they can have high interest rates. The fourth source is angel investors (friends, family or other business owners), and the fifth option is venture capitalists.
Often as a business owner, you will experience times when cash flow is hard to come by.
In my business as an author and speaker, prior to getting a publishing deal done with John Wiley and Sons, Inc., I was a self published author who always had to pay for my printing. On two different occasions over nine years, no matter how I looked at it, I did not have the cash to pay for books.
Yet I had speaking engagements coming up where I could sell books to the audience.
In both cases (years apart), I turned to close friends and business partners for help.
First, it was Rick Frommer who paid for a print run, and he just said to pay him back whenever I could. No interest, no agreement, no promissory note, just “pay me back when you can.” It took me about 18 months, and then he was paid back in full.
A couple of years later, it was Taylor Clark who covered the costs of a large print run for me. No credit check required – he just sent me a check and asked to be paid back within a year. The full principal borrowed and then some was paid back in a year.
I will be forever grateful to these two Angel Investors who just stepped up to the plate and offered some financial assistance to a fellow entrepreneur in need.
For that reason, both of these friends and business partners will forever have their names etched in the “Acknowledgements” section of all of my books as I will never forget their acts of genuine assistance to an entrepreneur in need.
How many people do you know who believe so much in you and in your business that they are willing to become Angel Investors to support you in your dream as you build your business?
Always reach out to these people and develop relationships; the world is full of Affluent Entrepreneurs eager to help other AEs in need.
This topic from my newest book “The Affluent Entrepreneur”, is also one of the topics that I speak on.
If you are a meeting or event planner looking for an opening, closing or keynote speaker I will be happy to customize topics to relate to the needs and interests of the audience I will be speaking to.
Please contact me the next time you need an Opening Speaker.