As a veteran and entrepreneur, at some point you will likely need some outside funding for your business. There are many resources to condider just like we discuss in class, Entrepreneurship for Transitioning Warriors. Trying to determine which source of funding is the best for you is the challenge. Here are ten helpful things that I found on the Atlanta Business Chronicle. It can be mind boggling because there are so many different lenders that offer so many different products. Choosing the best fit is key to success. As part of your search I recommend that you take a look at the SBA wedsite and especially the SBA Linc Tool. You may be surprised at local funding sources available to you.
Here is a short article by Marco Terry with five great ideas. In class, Entrepreneurship for Transitioning Warriors, we discuss the challenges associated with finding the money necessary to start and run your veteran owned business. It is not easy. That money can be a recurring issue. Cash flow planning is critical to success and vetrepreneurs need to look everywhere. Marco Terry has some experience in this field. He is the managing director of Commercial Capital LLC, a company that provides invoice factoring, purchase order financing, and asset-based lending to small and midsized companies.
September 12 - September 16
Kent Hoover, Business Chronicle Washington Bureau Chief, passed on some excellent information here. Veterans and transitioning military considering entrepreneurship need as many sources of funding as possible. Here is an excellent tool for finding funding. This is a valuable sourcing tool to use in Module 6 of the Entrepreneurship for Trainsitioning Military Program. Remember that funding for your business opportunity is available to veterans and transitioning military. The challenge is finding the sources that are right for you.
Here is a short article by Leslie Collins, Web Producer at the Kansas City Business Journal. We discuss your pitch in Module 5 and 6. Collins offers seven key points that veterans need to heed. Your presentation or pitch is a key component of your business planning process as we discuss in class. Your military training should help you prepare and present. Please take this advice and prepare accordingly.
Collins writes - If you're warming up to pitch to an angel investor, here are some key tips to keep in mind from a session at the 2015 Techweek Kansas City.
1. Do your homework
Before you approach an investor, do your homework. Find out which sectors and stages of companies they invest in and how much they typically invest, said Tom DeBacco, general partner of Flyover Capital. Otherwise, you could waste a lifetime talking to the wrong people, he said.
2. Know the path to commercialization
"We see a lot of ideas that are interesting ideas, and we like to draw the distinction between what I call vitamins and pain pills," DeBacco said. "Vitamins are these nice to have things taken to make you feel better, but there's nothing definitive about it. We like to invest in things where you're identifying someone's pain. It's a real and acute pain, and you've got a pain pill to send. It's a lot easier to go to market with something like that."
3. Be articulate
Instead of getting caught in the weeds, sharing unnecessary details, be articulate. Let investors know what you're trying to do, how you're going to do it, how you're going to reach the market and how you're going to make money, said Kelly Pruneau, network manager for the Women's Capital Connection.
1. Using the word 'conservative'
When an entrepreneur is sharing numbers, investors don't want to hear the word "conservative," Pruneau said. Investors will cut those numbers further. Investors want to see an entrepreneur who's excited, who thinks the sky's the limit. So use aggressive but realistic numbers, she said.
2. We don't have competitors
One of the don'ts Rick Vaughn hears often is, "We don't have any competition." But you've always got competition, even if it's the status quo, said Vaughn, managing director of Mid-America Angel Investors.
3. We're never going to need money again
Another pet peeve for Vaughn is when entrepreneurs share financial projections, saying they only need this first investment and will never ask for capital again. That's not realistic, he said.
4. Deferring to your CPA
Entrepreneurs need to know the numbers, said Jill Meyer of the UMKC Small Business and Technology Development Center.
"A big turnoff in a presentation," she said, "is not being able to speak to the dollars you need, why you need them, what you're going to do with them and understanding how those projections were derived."
Deferring to your CFO or accountant to explain financials is the kiss of death, she said — the check is being cut to you, not the CPA.
Many veterans consider the SBA for their funding. Here is an excellent article by Cassius F. Butts, Regional Administrator in Atlanta of the U.S. Small Business Administration. As we have discussed in class many times, the SBA is a great source of information. Even their website offers many great ideas. The SBA can help veterans find an SBA Preferred Lender in your area.
We discuss veterans access to venture capital funding during one of our financial modules. This is one of many forms of funding available for veteran entrepreneurs to seek out as part of their funding strategy. In this article Urvaksh Karkaria, Staff Writer for the Atlanta Business Chronicle, shares the status of venture dollars. Read on to see that investment remains high but the pace may be slowing. Entrepreneurs must understand the current and future market when developing a funding plan and modify that plan based on the market.
Here is an excellent article by Marc Kramer a serial entrepreneur and contributing writer to the Atlanta Business Chronicle. There are many ways to fund your business as we discuss in class. Many veterans, new to entrepreneurship, believe that a bank loan, the SBA, and debt financing are the primary methods of obtaining funding. You know from class that there are many different equity sources of funding. The key is to find the right source for you and your business. Marc Kramer offers some excellent points and reasons here that must be considered.
Kramer writes - Most entrepreneurs, especially ones who have never run a business before, always believe they need to raise money right away from friends and family, get in front of their local angel group, and/or contact venture capitalists.
The key is doing your homework and being prepared.
Here is a great short article about by Erin Lowry about business loans. We discuss these in class and Erin offers some key points here. It is important to do your homework when a veteran entrepreneur seeks funding for their small business. There are many options available to you for financing and loans are certainly one of those options. You need to shop around as Erin writes below.