Professional Documents
Culture Documents
Johnny Murrell, Executive Director, South Central Ozark Council of Governments (SCOCOG)
Crowdfunding
Jason Graf, CEO, CrowdIt
Self-fund
Borrow
Friends and Family
Outside Investors
Accredited
Non-Accredited
Accredited Investors
10-12 Million Households in the US, out of 117
million
Test: $1M net worth (exclude home & related
debt); or$200K income last 2 years (or $300K
with spouse)
crowdfunding
Syllabification: (crowdfunding)
Pronunciation: /kroudfndiNG/
Definition of crowdfunding:
noun
the practice of funding a project or venture by raising many small amounts of
money from a large number of people, typically via the Internet:
Donation Based
Donation Based
Passion
Emotion
A Cause
Civic Duty or Community Involvement
Expression
Think CauseMomentum.Org
WHY?
Market Research
Demand
Proof of Concept
Pre-Sales
Marketing
10
side uncertain
In Need of Funding
According to the Federal Reserve, there are 27 million
businesses that need capital in some form.
Video
mandatory
show you are a real person (credible / trustworthy)
reason to stay on page
higher rate of funding / viral
address the Portal community / THANK YOU
CREATIVE
traditional talking head / finger puppets / demos / voice over / stop animations, etc
keep it simple
CALL TO ACTION!!
Pictures
Audio
Incentives
important to success / put in the work & thought
wide range of price points
$5 - $100 = small
EASY TO DISTRIBUTE
MP3s, digital still pics, acknowledgments on a website, thank yous, etc.
$150 - $500 = medium
often physical goods
t-shirts / product, etc.
$600 - $1,000 = large
$1,000+ = extra large
live, custom, special goods & services, or experiences
Meaning / value to your contributors
Unique / Special / Limited edition
Create a Goods Menu
Allow contributors to be a part of your project
Utilize your strengths / hobbies - get personal
Deliver on promises
Stay engaged
Invite them to continue the journey
get feedback
ask them to post on the rewards they receive
Questions?
Managing Credit
Tracey Blaue, Consumer Credit Counseling Service
Gap Financing
Lisa Zimmerman, Justine PETERSEN
Coffee Break
Be back in 10-minutes!
Bootstrap Financing
Maximizing Benefits by Minimizing Risks
Raymond E. Williams, Williams Law Office LLC
Bootstrap Financing
Bootstrap Financing
Starting or financing a
company with little capital
using personal finances,
relationships, and
operating revenues of the
company
Savings
Credit Cards
Factoring of Accounts Receivable
Trade Credit
Customers Letters of Credit
Leasing
R/E Equity Loans
Friends and Family
Personal Risk
Agreements done without professional
assistance & documentation
Banks, Accountants, Attorneys
Friends and Family
Adhesion, non-negotiable, unfavorable terms
in Agreements
High Interest and Costs
Legal Risks
Examples
1) Family & Friends
Gift, Loan, Investment
If an investment, what are the terms
Examples
2) Loans
Security / Collateral
Promissory Note: Defines terms of
repayment and default
Security Agreement: Provides collateral for
the loan if case of default and defines the
terms in case of default
Generally, must be in writing if > 1 year
Avoids confusion over repayment, interest,
fees, and collections for both parties
Examples
3) Guarantors / Co-signers
Guarantor co-signs promissory note
After default, what happens lender takes
the Guarantors money but what happens to
the Guarantor?
Examples
4) Buy Sell Agreement with Seller Financing
New owner purchases business from Seller,
without bank credit & owner wants a
monthly income stream
Seller finances with monthly payments at
competitive interest
Buy-Sell Agreement but no Security
Agreement
Buyer decides to leave Missouri and defaults
on loan
Buyer sells all fixtures, equipment,
inventory and leaves the state
Examples
5) Leases
a) Software
Popular with software now especially with
the Cloud
What if it doesnt work right?
b) Equipment
Will you own it?
What if you dont want it?
Can you buy it?
What are the costs?
Personal Guarantees
Rare for a New Business to Not Face
Personal Guarantees for Financing
Often the case for Bootstrap Financing
Personal Credit Cards
Home Equity Loan
Leases
Loans
Friends and Family!
Goal of the business is to separate personal
asset liability from business asset liability
Legal Liabilities
Financial Liabilities
Tax Consequences
Im not an accountant, but I
encourage you to visit with one
about the tax consequences of
any of these methods of
Bootstrap Financing that you
might choose to employ.
Summary
Bootstrap Financing
Know and manage the risks at
the outset
Avoid legal and financial pitfalls
Tremendous Source of Capital
for Your Business
Raymond E. Williams
Williams Law Offices, LLC
(417) 256-4529
Self-fund
Borrow
Friends and Family
Outside Investors
Accredited
Non-Accredited
Accredited Investors
10-12 Million Households in the US, out of 117
million
Test: $1M net worth (exclude home & related
debt); or$200K income last 2 years (or $300K with
spouse)
Shares
When a company sells shares to other investors, it
gives up a piece of itself as a way to raise money to
finance growth.
Venture Capital
Young companies often need money for growth or for
research and development, but they're not far enough along
to sell stock.
Taking on a Partner
If you're looking to open a restaurant or a small
shop, you should understand going in that your
equity financing options will be very limited. You
might not get much interest from stockholders or
venture capitalists because the risk might be too
high and the return too low.
One option is to turn to the oldest form of equity
financing there is: taking on a partner.
You might tell a couple of friends that if they
each chip in $25,000, they will have equity in the
business.
In some instances, such as when everyone
invests the same amount of money, you will be
equal partners.
In other cases you might want to retain a
majority stake of the business and have partners
control less than 50% of the business.
Convertible Debt
Convertible debt blends the features of debt financing and equity financing. In bas
Those benchmarks might have to do with reaching revenue targets, raising money
Convertible debt offers investors a measure of security: They start out with a prom
THE PROS
THE CONS
Tutorial
Mezzanine Financing
Start - Up
Business Plan Only
Large Investment Sought
7 Accredited Investors
Debt / Equity
30% first half
40% total
Start-up Company
Founder asked us to partner
Needed operations / organization help
Accounting
Staffing
Management
funding
Secured 20% Ownership
Helped secure funding
DISCUSSION
Angel Investing
John R. Perkins, Inspire Capital Corporation
Briefing for
Key Definitions
Angel investing: Directly investing personal funds
in an early-stage business. Because the
investment occurs soon after a business is started
(and thus is risky), an angel must be financially
capable of losing the entire investment. As such,
most angel investors are relatively high-net-worth
individuals.
Early
Stage
Later
Primarily start-up
stage
$29.4B +7%
2013 VC Investment
Source: PwC/NVCA
Overview of CI
Created/formed by Columbia Chamber of
Commerce as part of its centennial
celebration $10K in start-up funds.
Deal-Selection Criteria
Primary focus on technology- or
science-based start-ups.
Especially interested in mid-Mo.
deals; will consider deals from
elsewhere in Mo.
Deal Process
Each step requires thumbs up for
process to continue:
1. Online application.
2. Prescreening by Missouri Innovation
Center (supports entrepreneurs,
operates incubator).
Results to Date
Typical member investment = $5K-$20K.
$3.7M invested in 18 deals:
4 from MU & 14 from community.
12 group investments & 6 investments by several
individuals.
Elemental Enzymes
Our mission is to provide ultra-stable
enzymes and other custom biologics to a
variety of industries. Our products are
engineered for use in harsh conditions
such as outdoors and in industrial
processes.
CI investment in 2012 = $400,000 from 35
members.
Thank you!
Questions?
Commercial Loans
Eric Judd, West Plains Bank and Trust Company
Lunch Break
Catered by Coltons Steakhouse & Grill
www.sba.gov
www.sba.gov
www.sba.gov
Start a business
Purchase an existing business
Refinance debt
Purchase/construct building, leasehold
improvements, equipment and inventory
Working capital and lines of credit
www.sba.gov
Benefits to Borrower
Help banks make loans in some cases where they
may not normally be able to make the loan
Longer term = lower payment = improved cash
flow
Helps with shortfall in collateral
No balloon payments
Favorable interest rates as we set maximum rates
www.sba.gov
Terms (7a)
Maximum to one borrower/business outstanding at
one time: $5,000,000
Generally, 75-85% guaranteed to bank; this is how
much SBA will pay out on a loss to the bank
Building purchase or construction: up to 25 years
Equipment, working capital, inventory: up to 10
years
If combined uses: between 10 and 25 years
Lines of credit: up to 7 years
www.sba.gov
10
Interest Rates
(Except SBA Express and 504 programs)
11
www.sba.gov
12
13
Microloans
The Microloan Program assists small businesses in
need non-traditional financing.
The SBA provides loans and grants to Intermediaries
who deliver technical assistance and training
A microloan is up to 6-years in length, fixed rate, of
$50,000 or less
It may not be a line of credit.
A microloan of more than $20,000 generally prohibited
Must be for-profit
Business must be located in U.S.
Show ability to repay loan through cash flow
Not be on parole, probation or incarcerated
Must be considered small
Not more than $15 million in tangible net worth or more than
$5 million in net profit (avg last 2 years)
16
Business plan
History/description of business
Management experience/resumes
Last 3 years of income statements and balance
sheets with interims to date
Last 3 years of filed business tax returns
Cash flow projections
www.sba.gov
17
18
Questions?
Contact info:
Eric Gholz
830 E Primrose
Springfield, MO 65804
(417) 890-8501 Ext. 203
Eric.gholz@sba.gov
www.sba.gov
19
Snack Break
Be back in 10-minutes!
No Cost to Taxpayers
$800
$12,600
Global Consumers
https://www.youtube.com/watch?v=5Ct7Ea_zmSU
https://www.youtube.com/watch?v=pXmhoFuz1-8
Export-Import Bank of the United States
Covered Risks
Commercial Risks
Insolvency
Bankruptcy
Protracted default
Political Risks
War, revolution, insurrection
Cancellation of import and export license
Currency transfer risk
Export-Import Bank of the United States
Streamlined application
EX-IM Bank will secure information on the first
couple of debtors and provide quote and debtor
approval within 5 business days for amounts up
to $300,000
Must Meet SBA Small Business Guidelines
Export-Import Bank of the United States
Class I:
Sovereign
$0.03
$0.03
N/A
S/DD/P; CAD
$0.06
$0.08
$0.20
1-60 Days
$0.16
$0.20
$0.55
61-120 Days
$0.27
$0.33
$0.90
121-180
$0.35
$0.43
$1.15
181-270 days
$0.43
$0.54
$1.45
271-360 Days
$0.53
$0.65
$1.77
Medium-term:
If contract has no more than 15% foreign
content, Bank supports 85% of the contract price
Military Policy
No Defense Articles or Services, or Military buyers
Three Exceptions:
Humanitarian purposes
Drug interdiction
Dual use items
Restricted Countries
EX-IM Bank is open in all continents, with the
exception of some countries
Country restrictions for political or economic
conditions and default Issues
Contact Information
Mark E. Klein
Regional Director
Central Region
Mark.Klein@exim.gov
Phone: 312.353.8073
Cell:
312.375.1883
International Banking
Importer
Open Account
Documentary Collections
(Time)
Documentary Collections
(Sight)
Letters of Credit
Trade Services
Standby Letters of Credit
Domestic Standby Letters of Credit
Widely used in the U.S. but also worldwide
Trade Services
Commercial Letters of Credit
Import Commercial Letters of Credit
Used as a mechanism of payment for imported goods
Advising /
Confirming Bank
Application
Issuing/Opening Bank
Goods
Applicant / Buyer
Importer
Contract
Beneficiary/Seller
Exporter
Trade Services
Documentary Collections Inexpensive, non-loan
related product for high volume trade with
repetitive customers
Import Documentary Collections
D/A or D/P
(aka CAD or Cash Against Documents)
Questions?
International Department
Phone: 1 (855) 682-2113 or (918) 631-1097
E-mail: arvestinternational@arvest.com
SWIFT: ARVTUS44XXX
Christine Glauber ~ (918)520-9316 ~ cglauber@arvest.com
One-on-One Appointments
Please check the schedule with Glenda and meet at your assigned table.