How to Finance a Start-up Business- More Information on This Product Will be Available on the Universal Business Structured Solution's Website on July 27th, 2013.
New York, NY (PRWEB) July 16, 2013 -- How to get Financing for a Startup Business.
Of course it is very exiting to have a great idea. In most cases a lot of effort has been put into the project before it lands on a desk of one of UB Solution's Financial Professionals.
Many people who try raising money for a Startup Business, and therefore contact Universal Business Structured Solution or its strategic partners, are under the impression that having a great idea is enough in order to get funded. Unfortunately in reality it is the case, and usually Startup Financing is possible only with the closest friends and family.
Any professional investor will require much more than just a great idea. Investor would want to be completely convinced that this business, if financed shall bring expected rate of return and stay in business long enough to provide a sufficient exit strategy
An Entrepreneur has to keep in mind that any professional investor, such as Angel Investor or Venture Capital Fund, is a business entity or person, usually has an expertise in particular industry, and therefore will consider a prospective transaction from a not emotionally involved potential business partner's position.
Any professional investor will require much more than just a great idea. An investor would want to be completely convinced that this business, if financed shall bring expected rate of return and stay in business long enough to provide a sufficient exit strategy.
UB Solution usually proposes the easiest stress test to an Entrepreneur: just try to put yourself in the shoes of potential investor. Would you as a potential investor be willing to fund this particular Startup Business with let's say 10 Million dollars, at this stage and based on the information provided?
An Entrepreneur should realize that Financing a Startup Business is a very hard and sophisticated process, that will require a substantial effort from both sides: the Entrepreneur and the Investor, but a well prepared Startup has much higher probability of being financed.
Provided information should help a startup become more prepared and prequalified for a prospective funding:
1. Determine how much money is needed and have exact break down for the future use of funds.
2. Have some money invested or ready to be invested into the project. Having equity in the project shows to a potential investor that Entrepreneur believes in the project and willing to risk its own capital.
Also be prepared to pay for any third party services: legal, appraisal, escrow, etc. if necessary.
3. Make sure that management team has sufficient experience in this particular industry and impressive resumes. For example: If the management team has experience in the entertainment industry, do not expect to get financing for a renewable energy project.
4. Have professionally written business plan with cash flow projections, complete marketing plan, IRR, debt coverage, etc.
There is only one chance for the first good impression. If project is rejected by a particular investor, usually the come back to this source is impossible.
5. Be organized and cooperative with a potential investor.
Organize an online data room and put all required info there. If additional information requested make sure it is provided in a timely manner.
6. Disclose all the information necessary.
If during the due diligence process lender or investor will discover any information, that has not been disclosed, in most cases financing for the project will be declined.
7. Have the Enterprise's Value calculated by a professional. It will give the company ability to intelligently discuss what amount of equity has be given up in exchange for an amount of capital.
In conclusion, many people think that getting financing and especially for a Startup is an easy task, that can be achieved without a professional help. It can be done only if principals have a very high level of professional knowledge in business evaluation, business plan writing, financial projections, marketing, etc.
UB Solution has the ability to get the right project financed, as well as in many cases, to bring a non financeable project to a financeable stage.
UB Solution is equipped with specialized knowledge of the marketplace. By examining every aspect of our client’s business UB Solution is able to engineer affordable financing quickly and efficiently.
Feel free to contact Universal Business Structured Solution for more information regarding our services or for an initial consultation and evaluation:
Yury Iofe, MBA
Universal Business Structured Solution
yiofe(at)ubssolution(dot)com
More educational resources by Yury Iofe:
http://www.ubssolution.com
Yury Iofe, Universal Business Structured Solution, 888-778-1437, [email protected]
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