Some things to consider?If you borrow the money (from any source) how will you repay it - from your personal income? Are all 6 of you going to be "equal" owners? If so, are you all going to be equal contributors beyond the capital - Hours, skills, etc? Also, have you defined the decision making process? What is your "collective" strategy for when the company needs additional capital? How complete is your business plan and are you all in agreement on it?
We are in the process of writing out our operating agreement for our LLC. The operating agreement will spell out the roles and responsibilities of all the members along with how profits/losses will be split. It`s an interesting quesion of how to split the profit/losses becasue the six memebers have diverse skills that bring somehing unique to the table. I`m a mechanical engineer with a background in systems engineering and project management. I have studied entrepreneurship for quite some time since this is my first business venture I have mainly "book knowledge". Others bring sales, negotiation, maunfacturing processing, automation, facilites, and bookkeeping backgrounds to the company. We have a first draft of our business plan. We are working on an market analysis to look at the market potential and the current compeititors. We are looking at what they don`t offer in services that we can bring to market. We do have at least one strong lead on a customer. Basically this customer has said as soon as we are ready they want to do business with is. We are also in the process of procurring a building. We plan to have a building by the end of thsi year or early next year. We have several strong leads on a building.
I wanted to get people`s take on peer-to-peer lending to help finance a startup company. A good idea? A group of six of us have started a high tech manufacturing company. One of the partners, a current business owner, had made it clear that he would like to see everyone in the group invest money as a sign of commitment in the startup. He`s willing to invest up to $30,000 of his own money. Another partner is willing to invest $30,000 as well. He`s not expecting everyone to match his $30,000 but he`d like to see a $5,000-$10,000 investment from the rest of us. I don`t have $5,000-$10,000 in cash. I was considering three options:
1) Borrow from friends and family
2) Use a credit card
3) Peer-to-peer lending
I am hesitant to borrow from friends and family. That can lead to personal problems. Credit cards can have really high interest rates. That leaves me with peer-to-peer lending. but I wanted to get the opinions of others.
What say you, Startup Nation?
You should be congratulated, because you have already done more to educate yourself than 80% of all entrepreneurs, and have increased your chances of success immeasurably!
My only suggestion: experts - accountant, attorney, insurance, lender.
Oh I agree. We are already looking for a business attorney. The way I look at it I think I should know the basics of accounting, business law, finance, and sales, and marketing. Now, I probably won`t be doing all these things by myself but whoever ended doing that job I want to understand what they are doing.
RocketScientist4/18/2008 1:58 AM