Forums: Discussions for entrepreneurs and small business.

Hello everyone,
I am the owner of an IT Systems Integrator company on the Romanian market. Recently we finished our business plan and sent it off to potential investors. To my great surprize we have now more people willing to invest in the company then I was actually prepared for.

My first question is what do you do when you have more people ready to invest then you initially wanted? The extra money would probably allow us to expand even further but the extra money is not foreseen in the business plan? Do I choose to go for more money than I asked for or stick strictly to the plan?

My second question is how do I decide what to give the potential investors in terms of money and shares in the company? I am sure there must be a formula for calculating how much you company is worth and how to give off shares to potential investors.

Thanks in advance!
Marius

You need to get a CPA and a lawyer.

-------------------------

Rebecka Melson | Virtual Business Services | www.vbsofok.com

Marius,

Congratulations on your good fortune. Apparently things operate a bit differently in Romania - if you can get investors by sending out a business plan, but the result is still a great one.

I would strongly suggest that you get professional advice before completing your deal. It can save you a bunch of pain later.

As to going for more money - remember receiving more money means you are selling more of the company.

-------------------------

Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
info@bizgrowthmasters.com

Marius,  keep in mind that a business plan is map.  Your route and therefore your plan may have to be altered by unforseen conditions along the way. 

Even though you may want to raise enough for 3 yrs of operation (for example) try to limit yourself to just the 1st or 2nd years funding goals.  That way you won`t be stuck with a plan that - in practice - isn`t the most successful. 

Treat your investors well.  Communicate early and often.  Thye will be your biggest supporters and your best source of additional capital.

-------------------------

www.bizbuddypro.com
Find out how we make investors WANT to do business with YOU
Get a free business consult - discover how to make more money today.

www.bizbuddypro.com

Thanks for all the replies. I have hired a business consultant and will be discussing later this week.

I always thought that there exists a formula for selling shares of a company. Somehing along the lines of: profit for the next 3 years x N = how much my company is worth...

It will be interesting to see what the investors themselves will want.

Thanks again!