Make Connections

Network, Get Answers, Find Members in Your Area, and More!

Forums » Startup Funding

Financing kills business... (or does it?)

    • 50 posts
    May 10, 2013 9:17 AM EDT

    In my opinion, it doesn't, but it helps to build up a business. We all know that in the current economy its not that easy to get business loans or fundings to the existing business. However, with the help of funding companies, it has become possible to expand our business successfully.

    Invoice Factoring

    • 68 posts
    January 22, 2010 7:20 PM EST

    I don't agree with the first point..."having no money forces creativity" - or rather, I do agree with the point but as an investor I'm not looking for an entrepreneur who is creative for creative sake - I want an entrepreneur who spends their time on the right things. Let me give you an example...the other day I wanted to fly to California - I spent 30 minutes on Expedia to find a flight...I could have spent half the day on Expedia, Travelocity, Continental's own website, priceline and hotwire...I could have spent all day at it and saved, perhaps, $75.  If I was an investor or if I was even the entrepreneur themselves - do I want them spending a day saving $75 (I mean - how much is their time worth? Less than a burger flipper?) or should they be focusing on getting more customers? Improving the product? Expanding Distribution? Keeping the existing customers 110% happy?

    Having too much cash leads to a lack of flexibility - having no cash leads to wasted time on all the wrong things. Measured cash, to allow the company to move efficiently towards set milestones and move the company up the growth that is the ideal.

    Anyone disagree?


    Andrew PS - Here's a free report on creating your startup success. Free report

    • 3 posts
    February 20, 2010 1:38 AM EST

         Though I won't speak in absolutes as far as funding or no funding (oh, how I could use and would love some funding), I have to say I am definitely in GearGoggles camp as far as the argument goes. 

         You certainly adopt a different mindset when you have little or no money to work with.  And Andrew asked if anyone disagrees with him, and no disrespect (Hey, he asked!) but I DO disagree.  I think his answer actually made the point about thinking creatively when you are forced to.  He said he "wanted to go to California" (that's fine), so he looked up a plane ticket (of course), and bought a ticket at a savings without spend too much time in manpower.  All good stuff, and very sound thinking.  But we are not talking about sound thinking!

         Someone without money questions everything: 1.)  do I "have" to go or "want" to go?  2.) can I gain what I'm trying to some other way -- via computer, people and places around me here, etc  3.) If I "have" to go to California, is there some other way to get there  4.) If I have to fly could I swap services with a charter flight service, etc.

         I guess I'm just agreeing with the others that your mind doesn't go to other places if it perceives it doesn't have to.  Some people crumble under pressure, but others thrive and that pressure is just what is needed to propel them to success -- pressure that isn't felt as strongly when financing is available and waiting. 

         Struggling is not fun.  But sometimes it's necessary, possibly even beneficial.  Just some thoughts.


    • 63 posts
    December 18, 2009 8:29 AM EST


    However, I can also cite may situations whee the lack of adequate capital killed the company and the idea.

    I believe the key to successfully building a company is to have access to the "right" amount of capital at the "right" time.


    Business Growth Masters, LLC -
    Capital Catalysts for Entrepreneurs
    Home of the Scalable Business Plan and QuikStart Capital Programs

     Amen to that! Speaking from someone that has lost a brick and mortar business due to lack of adequate capital....believe me it had nothing to do with being lazy or lacking creativity. It was more like Robert said, not having the "right" amount of capital at the "right" time.

    Sylvia Business Plan Mentor

    • 101 posts
    December 25, 2009 9:43 PM EST

    This is sort of the mindset I have as I open my cafe. I figure if it's going to work, it's going to work. If it's going to fail, it's going to fail. I'm not sure if my idea plummets straight into my safety net, that I'll have any option but close anyway. One of my potential startup members says, I should have enough of a safety net to pay all expenses for a year. I say, if I don't make a single sale in a single day, a single week, even - I'm screwed and I know it. The "whole year of complete and utter failure" scenario isn't realistic, and moreover, I won't let it happen. I'm no poker champion, but I know when to fold a losing hand. I won't need a full year's expenses, because I won't drag a dead business around for a whole year.

    Making limitless possibilities much more limited.

    • 927 posts
    December 18, 2009 8:12 AM EST


    An interesting view. Certainly there were companies during the dot com boom that fit your scenario of "plenty of dough" in the bank. Many should never received any capital.  There aren't many of those situations around these days.

    However, I can also cite may situations whee the lack of adequate capital killed the company and the idea.

    I believe the key to successfully building a company is to have access to the "right" amount of capital at the "right" time. The secret, of course, is knowing the answers to the "right" questions!

    Business Growth Masters, LLC -
    Capital Catalysts for Entrepreneurs
    Home of the Scalable Business Plan and QuikStart Capital Programs

    • 11 posts
    December 18, 2009 7:44 AM EST

    This is a odd subject I know, but I am going make a valiant effort to convince you that financing can kill a start-up's chances at long term success.  Doesn't make any sense does it?  But there is some well founded truth to the statement.

    A good idea makes money.  A bad idea needs financing.

    Ok, I'm not saying that a business doesn't need financing, what I am saying is that a business needs to have too little financing.  New start-ups need to be constantly adapting their idea and business model to what their audience wants.  A business with a ton of cash doesn't have to adapt or change to properly

    Having no money forces creativity...

    It is really true.  When there is a lack of funds it creates urgency, and when there is too much money it lets us be lazy.  It really does!  Why do we need to push so hard?  There is plenty of dough in the bank, we aren't going under!!!

    anyone agree with the idea here?

    Tim Pletcher

    • 11 posts
    December 18, 2009 8:37 AM EST

    Sylvia, I'm sorry to hear that!  I'm afraid that my idea has been lost though.  Let me ask, would financing have brought in new customers? If the revenue wasn't coming in to cover the costs would the financed money brought the customers in? ...or would it simply have delayed your need to have supportive success...

    Tim Pletcher

    • 11 posts
    August 26, 2012 2:44 PM EDT

    Wow, a lot of great comments! I think that most all of you are tracking with my point; I'm not saying financing is bad, I'm just using a creative talking point to challenge our mindset.

    My most recent venture accepted Capitol and I don't (entirely) regret it. The point here is that businesses should be thriving and growing because there is legitimate demand and need for their product in the marketplace.  Captol infusion should occurr to enable the growth of an already proven idea (proven meaning "already making money").

    Great thoughts everyone! 

    All the best


    Tim Pletcher