Have raised $400K, now time for $2 million.

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Have raised $400K, now time for $2 million.

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trickygoods

posts: 1

Jan 10, 2008 1:41 AM ET Quote Report Abuse

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Our rapidly growing business has raised $400K from friends and family. As it approaches profitability, the next phase would be optimized if we were to raise $2 million. We are 3 years old, and are currently patent pending status, with the possibility of a patent being approved in a few months. Our product is original and is sold online, in our own stores, and distributed to other retailers on the West coast. Okay, so much for the background.

Question, while we need only $300K now, and the balance over the next 24 mos., it seems to me it would be easier and more economical with respect to time and energy to go after the full amount now (ie $2M). Is there a way to structure an investment that is staged based on performance, at a rising (and scheduled) valuation? For instance, take $300K now at $4M valuation, and the subsequent amounts at higher valuations?

Just a thought. The fundraising process is so time consuming - I guess I`m looking for a short cut.

Thanks for any help!

robertj

posts: 1461

Jan 10, 2008 12:41 PM ET Quote Report Abuse

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It is possible to structure a deal so that each "tranche" is effectively based upon a higher valuation. Just a word of caution - I`ve seen several of those deals be pretty one-sided because the company is committed to sell at a given price but the funds are "not available" when needed.

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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

lis007

posts: 7

Jan 15, 2008 3:34 PM ET Quote Report Abuse

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Hello,

I would like to know..what do you do if you are trying to start a business but no one will help you with funding because you are in the R/D Stage.I have tried Score,SBA,Micro-loans,MSBTDC,Grants ,Banks and many other resources but no luck.I have even received letters of recommendations from some of the companies that denied me stating that I have a great new innovative product that will generate millions but onces again R/D plays a big part. I have all the license & copyrights,patents that is needed for my new innovative product but no funds to get up and started.Please can anyone offer me some help or advise.My product will serve millions of children and adults as well as our millions of shell-shock veterans who suffers from incontinence.They will assist the user with taking there medication at the set interval time frame. I already have a manufacturing company Hana Timepiece Co. CEO/Mark Luton who is working on them as we speak. I just need more funding help.And yes I have made a large investment into my company as well. Please just take a moment and offer me your advise.A word of encouragement or a word of advise can go along way for someone like me.

Thank You So Much!!!!!

liss007

robertj

posts: 1461

Jan 15, 2008 4:36 PM ET Quote Report Abuse

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liss007,

There are a number of ways to bring capital into a business. Your product is needed, so I`m sure with preparation, practice and persistence - you will be successful.

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

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

lis007

posts: 7

Jan 15, 2008 6:38 PM ET Quote Report Abuse

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Thank you, Would you recommend any ideals that you feel that will assist me with rasing funds. I sure could use some advise.You can also visit them on myspace.com/ItHappen .This way you can see what I am trying to do. Please offer me your support. Again everything is license & carries all copyrights

Thanks Liss007

Malte

posts: 30

Jan 29, 2008 7:16 PM ET Quote Report Abuse

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Hi Liss007,

If your product is really needed, and you on top of that have received recommendations from companies or investors that chose not to fund you, there must be something they didn`t like about the project.

If we say that your idea (the core idea of your future business) isn`t the problem it could be several other factors. Maybe the budget isn`t too good? Maybe the chances of an investor getting a good return on investment aren`t too good? Or maybe the way you presented the idea (your business plan) was not satisfying for the potential investors?

Remember that you are trying to sell a product, but most investors do invest to make more money than they invest.

Let me know if you need any specific help, and good luck :-)
Malte

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My personal blog on strategy, marketing, branding and general topics on business TheBusinessUpdater.com

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Have raised $400K, now time for $2 million.

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