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Capital Sources Pros/Cons

What’s Your Best Source of Capital?

What are your options when seeking to raise capital? What are the usual sources for early stage companies?

Below are the commonly recognized sources of capital for early stage companies and their pros and cons.

What’s your best choice?

Family & Friends

Pros

  • Low level of investigation into the merits of the project
  • Emotional investing

Cons

  • Repayment of capital
  • Strain on the relationship

 Angel Investor

Pros

  • May be able to return for future rounds of funding
  • May gain valuable help and advice

 Cons

  • Can become more of an “over-the-shoulder” type of partnership where the angel is second guessing the owner
  • Repayment of investment

VC Capital

Pros

  • Large amount of capital
  • May gain valuable help and advice
  • May gain the influence of the VC network

 Cons

  • Loss of control of the company
  • Loss of more than 85% of ownership in the company
  • The company will generally be sold in 3-5 years whether the entrepreneur wants to or not

Partner

Pros

  • Share the stress
  • Advice and experience if partner is from the same field

 Cons

  • Can mean the loss of control/autonomy in moving the company in the direction the owner wanted it to go
  • Can be good at the start but disagreements on how the company is run can create a very uncomfortable working environment
  • Loss of control of the company
  • Loss of more than 85% of ownership in the company
  • The company will generally be sold in 3-5 years whether the entrepreneur wants to or not

When Your Business Lacks Capital

What does it mean for your business when you lack access to capital?

Page2-man-on-tightrope

Capital for SMB’s has become increasingly difficult to get. If you don’t have the perfect credit score or don’t have collateral for a loan, it makes access to needed funds that much harder.

When your business lacks access to adequate funding:

  • You lose opportunities to do bigger projects,
  • You lose opportunities to take bigger orders,
  • Your ability to maintain current levels of operations is threatened,
  • Your ability to develop new products and services to remain competitive                              and capture market share is threatened

The viability of your business is at risk when you lack capital.

So, what are your options?

Capital Advisory

An Inability to Raise Capital

Puts Your Business at Risk

Trying to wrap his head around this problem

According to a national survey of independent business

owners conducted by the Institute for Local Self-Reliance in

partnership with the Advocates for Independent Business, of

those businesses that applied for a bank loan in the last two

years,

42% either failed to obtain a loan

or received a loan for less than the

amount they needed.

One consequence of this credit (capital) shortage is that

many small businesses are either not adequately capitalized

or are forced to rely on high-cost alternatives like credit cards.

Both scenarios make your business more vulnerable to failing.

Click here to read more about what you can do

The Bone Yard

The Bone Yard

The jungle is no place to rest on the past. Everyday waking up in the jungle is a challenge to survival! Many don’t survive the day. The bone yard is evidence of that!

 Change and Survival

Continuing to do the same things that don’t work is a bad approach. Change is the keyword in the jungle; you never know what is watching your habits. Constant change that improves your situation is a major factor in survival.

 

The Solution

It is the same in business, but how can you keep pace with all the needed changes? In the jungle, primates learn to collaborate early on. Getting help from experts is a critical survival technique.

Taking Action

So many times business owners and managers are immobilized because marketing and sales programs seem so daunting. Change is the real solution.

You don’t have to do anything crazy!

You just need to rethink your role in the jungle.  If you want to get your head out of the sand, or move to a new place, we can help.  We can help your business adapt and change to be more competitive in today’s business jungle.

Get Quick & Easy Sales Leads

Evolution of man

Magnum Marketing & Sales Program Video

A Dangerous Path

The Lions are Lounging

You approach the river but see the lions laying in your path, lounging leisurely. Eventhough they aren’t directly threatening you at this point you know how territorial and dangerous they are.

That’s the way it is in the jungle. Many times real threats are masked by seemingly innocuous settings.

 

The DilemmaBig lion lying on savannah grass. Kenya, Africa

You are faced with a dilemma. You can let the lions keep you away from the river and the water you need to survive or overcome the lion threat. What will you do? There doesn’t seem to be a clear answer. However, staying where you are will eventually mean sure death from lack of water.

 

The Solution

You need a strategy to get past the lions to the water. You need some help from others who have been able to navigate that treacherous path before and survived.

You notice another group headed for the river and you approach them. They tell you they have done this before and you can join them.

Taking Action

So many times business owners and managers are immobilized because marketing and sales programs seem so daunting. However, like our traveler to the river, doing nothing is not a real solution.

You don’t have to do anything crazy!

You just need to rethink your role in the jungle.  If you want to get your head out of the sand, or move to a new place, we can help.  We can help your business adapt and change to be more competitive in today’s business jungle.

Get Quick & Easy Sales Leads

Evolution of man

Magnum Marketing & Sales Program Video

The Baboons are Laughing

Baboon

The Baboons are Laughing

It’s Tough In The Jungle

You know the feeling…

You’re telling your staff and your prospects about your great product (product or service). You explain how it is a great buy and something everyone wants and needs. You explain it isn’t a matter of why they would buy it but why not!

That’s when you see their faces with that unmistakable smirk. Hmm. Your enthusiasm may dim a bit and your confidence in the greatest product ever diminishes.

 

You know in your heart the potential for the product, what it will mean to your customers and to your company. If you could just get everyone to believe and try it they would see. But they just give you that look and you know they are laughing on the inside. You know they are even if you can’t hear them.

That’s what it’s like in the jungle. It’s hard to convince people to change what they already know and what products they are already using. Displacing incumbent suppliers is very difficult.

Here are some of the things you will need to do to displace an incumbent and get new business for your company.

  •  Develop rapport with prospects.
  • Get prospects interested in hearing about the new benefits from your product.
  • Understand prospects have real pains that your product can reduce or remove.
  •  Make it easy to understand your product.
  • Make it safe to try your product – no downside.

What will you do when confronted with this situation?

  • Become disheartened and give up on the new product.
  • Become angry and respond aggressively to staff and clients who “just don’t get it”.
  • Become the Primate, the smarter animal, and educate and entice staff and prospects to find out more about your product.

You don’t have to do anything crazy!

You just need to rethink your role in the jungle.  If you want to get your head out of the sand, or move to a new place, we can help.  We can help your business adapt and change to be more competitive in today’s business jungle.

Get Quick & Easy Sales Leads

Evolution of man

 

A Jungle Story

A Marketing Jungle

A Marketing Jungle

A MARKETING MYTH:

“If you build it they will come.”

This is what many start-up entrepreneurs, business owners and small business managers believe. It couldn’t be further from the truth. As a matter of fact, it’s likely “they” won’t even know “it” exists, let alone seek it out. 

Even if “they—your future customers—know your business exists, how will you stand out in a very crowded jungle of sounds and ideas (think advertisements), and products, services, and deals?

Have you ever been in a jungle?

Magnum Multi-Chanel Marketing Information

Have you ever been in a jungle?

Probably not. But imagine that you were. Could you tell the difference between the sound of a canary and a cockatoo; or a leopard and a lion? Would you know which snakes are poisonous—or which fruits?

Well, the jungle of “information age” is here and you’re already deep inside of it.. Most business people are really confused by this noisy, unfamiliar environment. Unlike a “real” jungle, which would be much easier to understand and adapt to since it doesn’t change as much or as fast, today’s business jungle is tougher to adapt to.

How do you make the jungle work for you?

Consider for a minute how animals instinctively adapt to threats and opportunities. What is your animal persona in this brave, new jungle?

The Ostrich: sticks its head in the sand and hopes the threat will all go away.

The Homing Pigeon: keeps going back to the same place, again and again, because it’s what’s comfortable and familiar. The homing pigeon hopes things are going to go back to the way they used to be; it’s just a matter of time.

The primate: keeps adapting and changing with the changing environment. Of course, the only animal that will not ultimately perish is the one who adapts.

So, which one are you? Or more importantly, which one do you want to become?

You don’t have to do anything crazy!

You just need to rethink your role in the jungle. If you want to get your head out of the sand, or move to a new place, we can help. We can help your business adapt and change to be more competitive in today’s business jungle.

Get Quick & Easy Sales Leads

Evolution of man