If you want to borrow funds or attract investors, make sure you have ...

As discussed by the The Fundable Entrepreneur,? If you have ever tried to raise money for a business, you have heard the phrase ?Skin in the Game?. It is the one key phrase that will shut down any fundraising conversation in microseconds.

So where do you go? In terms of start-up funding, people in the investment world usually proclaim the ?Triple F? (friends, family, and fools) round as the first phase of funding.

But even before that, you have the bootstrap round. Putting your own ?Skin in the Game?, and funding your effort by tapping your own assets.? This could be savings, securities, or loans (like a 2nd mortgage). The concept here is that by investing in your own effort, you are signaling your level of commitment to investors. Some investors see this as a sign that you are emotionally and intellectually all in.

In many cases, investors won?t belly up to the bar unless you have gone through this round.? The risk to investors should be minimal, even early in the game.

The risk is high for an entrepreneur who leverages themselves to the hilt or drains their bank accounts, in other words, they have taken on far more risk than any investor will.

Most entrepreneurs own VERY little of their company by the time they exit. They have been diluted many times over and stand to gain a very small amount when compared to investors. In many ways their dream is no longer their own and the payout might be just enough to get them out of the debt they started with.

Here is the kicker. When an investor really likes what you got, they will overlook the need for ?skin?. When the investor falls in love, the entrepreneurs epidermis stays intact.

So, as the person who?s looking for the money, I have to find a way for that investor to ?fall in love? with my idea.

Is if?s a lender, or an equity stake, the more you can get that lender or investor to fall in love with you and your business, the better the chance you?ll have of getting the money you?re looking for.

Do you need more money in your business? Do you have a plan that?s sure to get someone to fall in love?

Copyright Information 2012 Professional Association of Small Business Accountants

Presented by Steven A Feinberg, CPA of Appletree Business Services LLC, a PASBA member accountant, located in Londonderry, New Hampshire. Steve has more than twenty-five years experience in Federal and New Hampshire issues, specializing in small business general, tax and payroll matters. For additional information on these and other current business and tax issues, email Steve at info@appletreebusiness.com or call (603) 434-2775.

Steven A. Feinberg ? www.AppletreeBusiness.com ? Get Appletree Blog via Email!

Filed under: Uncategorized Tagged: | bank loan, Business, business plan, Small Business

arthur christmas asus transformer nebraska football nebraska football online deals leap pad lauren alaina