Featured Coaching Training: Starting A Business 101
Do you have a business idea, but don't know where to start? In this series you will learn practical business tips, the steps to starting your business, getting the right people on your team, and how to use PR to promote your business.
Featured Coaching Excerpt - Notes & Transcript, Part 1
Action Step: Seek funding from your local bank first because it will be the least expensive capital
Jargonization Translation: Angel Investor - An individual (usually a family member or friend) who invests his or her own money in an entrepreneurial company.
Lesson Nugget: A benefit to an angel investor is they provide funding, but can also facilitate as a business advisor.
Lesson Nugget: Another option is to seek funding from a financing company similar to Guidant Financial that offers a variety of small business financing solutions.
Jargonization Translation: Venture Capital - "Money provided by investors to startup firms and small businesses with perceived long term growth potential." - Investopedia.com
Lesson Nugget: Many investors will feel entitled to give their input on your business plan because of the capital they invested.
Lesson Nugget: Being rejected is part of the process of seeking funding, but if you have done all of the necessary work and systemically make the effort to contact investors, you will eventually succeed.
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-I'd say this, if I were you, I would rather fund through a local bank. Because a local bank, they just want interest. They don't want to come to your meetings. They don't want to talk to you all the time. They don't call you every Tuesday and give you their advice. So in my mind, for funding, option one, is I would recommend a bank to you or anybody else.
I'd say, look, if you've done the work, if you sincerely have put the time into it and you've done these 10 steps, I'd go to my bank. Because it's going to be the least expensive kind of capital out there. You're getting money and you just pay interest.
Now if the bank is not an option or they said no, the next area I would go for is I would be looking for an angel investor. Why? Because if you can't get a bank loan for what you're doing, you probably need somebody who has some wisdom, right? Who can kind of coach you along the way.
So I don't want money-- maybe I need more than just money. I need some advice. I need an advisor to help me. I need kind of a coach, I need sort of like a-- you know?
And that's why my wife and I don't invest in stuff right now. Because I'm telling you, when you put money in, the guys call you all the time and they want help. So maybe that's what you want, though. You want a guy. That's how he makes his money. He puts money into a business and he coaches you. Now for that he's going to want equity, but maybe that's what you need, which could be a game changer. You need someone to coach you and help you. Make sense?
-So angel in my mind is like-- bank, angel, and third is I would look at something like Guidant Financial. And what Guidant Financial is, is they are a conduit, they are a connection point to multiple sources of funding. So what they do is they have a very good relationship with hundreds of banks, hundreds of lenders, 401k programs. They have all the forms, the documents, the templates, the relationships. They have that all.
So one fun example on Guidant Financial. There were some dudes who wanted to make a vodka, a premium brand of vodka based in Washington. And he helped fund these guys. But not only did he help fund these guys, he was able to help them get money when it didn't seem obvious that there was money available. And he give them advice and insight.
And they have hundreds of employees. They have like, 75 to 100 employees. That's all they do. They have one team of people that if you ever need help with IRS compliance. You know, how do I get my 401k roll over? How do I do this? They have people that do that.
Another team of people that will how do I fill out this document? What do I do? They have a whole team, customer service, and they help you through it. But these would be my three that I would go for. And I'm going to give you a number that will probably blow in your mind. For Thrive for venture capital, I have been told no over 400 times.
-How many times were you told yes?
-I don't know, I think I'd say 13, 15. And I've been told yes by probably 30 people, but there's probably 15 I didn't want their money because I didn't want their feedback. Other guys I wanted their money because I wanted their feedback. Does that make sense?
-So if somebody wants to put money in my company, it's like if your father-in-law pays for your meal. If your father-in-law is giving you checks because you're going through a rough patch, he probably wants to exert some influence on you.
If your father-in-law or mother-in-law ever want to take out to eat, you know they're probably going to tell you where to eat, when we're going, when we're coming-- you know what I mean? it's a gift with strings attached.
So such is the case with investment dollars. The bank though doesn't want to give you feedback. They want you to just pay them and they're good. So they're going to look at more documents ahead of time, but once they approve you, they're like, hey, just do your thing. Make your payments. All right.
Now an angel though, you've got to have that relationship. And the third is with Guidant. That's kind of a mixture where they can connect you with all the different options. That's what I would do.
But I'll tell you that-- I'm just being totally candid with you-- over 400 either emails, presentations, phone call, some way or another, I've been told no.
-It's a numbers game.
-I mean, if you do all this right, what I've looked at here and what I've seen on the website with this training, if I follow all this stuff, it's going to limit the amount of nos. And rule number one to business is you have to make contact with people. So you have to make contact with people who want to lend, you want for yourself as well as possible. This is what I take away from this.
-Yeah, and I know that you will succeed in getting it if you're just pig headed and determined. A lot of people talk about Steve Jobs like he's this man angel or like he was this deity. But he was a guy who struggled. He was a guy who had challenges. But he was a guy who wanted to fund Apple and no one would say yes.
And his story is he called through all the people in the valley, all the capital funds in the valley, and he called through them, and then once they all said no, he called through them again. And apparently, it was on the third or the fourth attempt, I think it's the third attempt to be historically accurate, but in Walter Isaacson's book about Steve Jobs he explains this.
I think it was the third attempt. A guy who had told him no three times is like, what do you want? He's like, I want you to fund us. We're in a garage and we believe we can change the world with these products. Just come meet.
So the guy went to his house and he met. Steve's mom was there, Wozniak was there. He's in there meeting at their kitchen table and that's how they decided to do the deal.
And to build your faith a little bit I made a list that I wanted to read off to you. And this is the last thing I wanted to harass you about today, is it all started in the garage mahal. Amazon, started in a garage mahal. These guys, put the address here so you can Google Earth it and you can see. But Amazon started right there in the garage in Bellevue, Washington.
Apple started a Los Altos, California. Right there, that's the address. Disney was started there, you can see, in Los Angeles in a garage. Google, in a garage. Menlo Park. Harley, started in Wisconsin. Hewlett Packard, Palo Alto. We go on and on. I mean, all these people started in the garage with the big dream, but you're going to have to be like super intense about getting all this done in the next 14 weeks. Feel up to it?