new business growing faster than capital will allow. Advice on finding an investor

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10-13-2013 , 09:35 PM

Ibrokespringfield

newbie

Join Date: Oct 2013 Posts: 18

I have a business that I started doing a few months ago and it has grown very fast. It's a cell phone buying service but acquires devices in a way no one else in the industry is doing and we are having great success. We have done $20,000 in revenue in the past 7 days and are turning down existing opportunities due to capital issues. I have never looked for an investor be for and honestly don't know the first place to look. Any advice?

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10-13-2013 , 10:30 PM

McKaig

journeyman

Join Date: Sep 2008 Posts: 333

Please explain the capital issues

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10-13-2013 , 10:47 PM

adept

Join Date: Mar 2011 Posts: 729

try google there are 100 of websites to find VC's/Angel investors.

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10-13-2013 , 11:40 PM

Ibrokespringfield

newbie

Join Date: Oct 2013 Posts: 18

Quote:

Originally Posted by McKaig

Please explain the capital issues

We don't have enough capital to keep buying the inventory that's coming in while we sell the current inventory we have. If you know this industry it's a good problem to have bc the demand for the devices is high, but eBay limits, the amount of opportunities we have, and limited capital is not allowing us to grow as fast as we could.

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10-13-2013 , 11:43 PM

Ibrokespringfield

newbie

Join Date: Oct 2013 Posts: 18

Quote:

Originally Posted by dp

try google there are 100 of websites to find VC's/Angel investors.

I mean obvs I've used google. The websites and info out there is generic and the contact info for people is just a cold email of which I'm sure most investors get hundreds a week or day.

I'm more asking in an area that doesn't have a lot of angels/vc (midwest), what are some ways to attract potential investors without just cold emailing.

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10-14-2013 , 12:24 AM

SlowHabit

See my coaching listing

Join Date: Apr 2006 Posts: 4,394

Get a business credit line from bank.

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10-14-2013 , 12:42 AM

Truthsayer

banned

Join Date: Nov 2012 Posts: 2,251

Yeah pretty much. If you have a viable business and just need capital to bridge, a loan/line of credit shouldn't be a problem. In which case, why would you give away equity?

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10-14-2013 , 11:08 AM

Gullanian

Carpal \'Tunnel

Join Date: Dec 2006 Posts: 14,014

Why surrender equity with VC/angel when you have a simple cashflow issue. Do a 1 page sheet showing your numbers and problem, go to a bank and get a loan.

If you have anything you can sell, car, remortgage, savings, investments et al, possibly consider this as well as it might be cheaper than a bank loan. (No idea but worth working out).

Maybe look at credit cards as well? If you can get a 0% one for 6 - 18 months could be free borrowing but just make sure you are perfectly capable of paying it back on time and perfectly understand the agreements.

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10-14-2013 , 11:45 AM

whalesneedlove

stranger

Join Date: May 2012 Posts: 10

I know a couple people that might be interested, assuming this is a real, viable, and legal business. Shoot me an email at my username on gmail if you want.

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10-14-2013 , 11:48 AM

#10

Gullanian

Carpal \'Tunnel

Join Date: Dec 2006 Posts: 14,014

Quote:

Originally Posted by whalesneedlove

I know a couple people that might be interested, assuming this is a real, viable, and legal business. Shoot me an email at my username on gmail if you want.

OP, I wouldn't waste your time doing this. You want to strive as far as possible to keep hold of 100% your shares. Surrending equity for cash flow issues should be a last resort. Also solicitation for investment through a low post count forum user should be at the bottom of that list as well.

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10-14-2013 , 02:13 PM

#11

Ibrokespringfield

newbie

Join Date: Oct 2013 Posts: 18

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Originally Posted by Gullanian

To address this and the other similar responses I'm young with no real assets and the amount of funding I would need to be able to grow as fast as we have the opportunities I would need much more than any unsecured line of credit or credit card would give. Something like that would be a tiny tiny bridge to gap the cash flow issues. We are experiencing the problem that kills tons of businesses. Grew to fast and got ahead of ourselves and are having to slow down and turn down profit and opportunities.

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10-14-2013 , 11:48 PM

#12

BrianTheMick2

Long way to go and a short time to get there.

Join Date: May 2012 Posts: 19,444

Quote:

Originally Posted by Ibrokespringfield

If it is that good of an opportunity, then get loans from wealthier friends and family.

If you don't feel comfortable doing that, then it isn't a viable opportunity.

Given that your business seems to be buying stuff for cash on hand and then selling it for more cash, I can't possibly see how growing slower than you'd like would "kill" your business unless you have already taken on debt you can't afford. If you think it will, then taking on debt will surely kill you, and if you have already taken on debt you can't afford then there is absolutely no justification for anyone investing in your idea.

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10-14-2013 , 11:53 PM

#13

kurosh

using god mode

Join Date: Aug 2004 Posts: 8,109

Are you the same idiot buying and selling phones on craigslist that was trying to sell your secret and train people in different cities?

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10-15-2013 , 12:39 AM

#14

Justine Bieber

adept

Join Date: May 2012 Posts: 709

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Originally Posted by kurosh

Are you the same idiot buying and selling phones on craigslist that was trying to sell your secret and train people in different cities?

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10-15-2013 , 07:06 AM

#15

NxtWrldChamp

Carpal \'Tunnel

Join Date: Feb 2008 Posts: 9,082

obviously

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10-15-2013 , 07:46 AM

#16

The Financier

veteran

Join Date: Nov 2008 Posts: 2,322

If you are doing listings just on eBay why not expand to other sites so you can turn over your inventory quicker?

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10-15-2013 , 12:58 PM

#17

adept

Join Date: Mar 2011 Posts: 729

travel to NY/LA and hustle.. plenty of VC's

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10-18-2013 , 03:23 AM

#18

j20s

banned

Join Date: Sep 2012 Posts: 331

The lack of awareness in this thread...lol.

Don't give advice if you have no clue, please, you're only hurting people. Getting a business loan is infinitely more difficult than most of you seem to think.

I would give some actual advice, but some wannabes in this forum are certain that I am out to somehow scam people, perhaps through some sort of subconscious mind control.

Edit: I didn't analyze or pay critical attention to this specific instance (if anything, OP's ambiguity and the general industry/problem makes it seem odd, but whatever), but the above will hold true far more often than not, generally speaking.

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10-18-2013 , 03:24 AM

#19

j20s

banned

Join Date: Sep 2012 Posts: 331

Quote:

Originally Posted by dp

travel to NY/LA and hustle.. plenty of VC's

Wrong answer again.

Why do so many people feel compelled to give advice when they are so clearly naive to the subjects they respond to?

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10-18-2013 , 05:53 AM

#20

malloc

grinder

Join Date: Aug 2008 Posts: 628

Nature of the internet unfortunately. No qualifications required to speak with conviction.

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10-18-2013 , 09:17 AM

#21

mmbt0ne

Carpal \'Tunnel

Join Date: Aug 2004 Posts: 22,077

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Originally Posted by Ibrokespringfield

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Originally Posted by whalesneedlove

I know a couple people that might be interested, assuming this is a real, viable, and legal business. Shoot me an email at my username on gmail if you want.

Before this thread goes any further, can a mod confirm these two users aren't posting from the same IP?

A brand new poster making a thread basically asking for money and then another guy with almost no posts immediately offering money seems more than a little fishy to me.

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10-18-2013 , 10:26 AM

#22

Ibrokespringfield

newbie

Join Date: Oct 2013 Posts: 18

Quote:

Originally Posted by BrianTheMick2

You're correct, I worded it bad. It won't kill the business at all, were profitable and growing, but can't grow near as fast self funding it and turning down big profitable opportunities sucks, so looking for an investor to help.

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10-18-2013 , 10:26 AM

#23

adept

Join Date: Mar 2011 Posts: 729

Quote:

Originally Posted by j20s

Wrong answer again.

Why do so many people feel compelled to give advice when they are so clearly naive to the subjects they respond to?

I would love to know what you do for a living that makes you an expert??

how is this bad advice... Ny,LA, San Francisco are filled with wealthy people looking to invest in an opportunity.. IF OP does not have any friends or family that are looking to do so, he needs to move some place where this is a lot of money floating around. guess the guys from Facebook were completely wrong in moving to San Francisco to Network..that worked out horribly for them

Last edited by dp; 10-18-2013 at 10:39 AM.

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10-18-2013 , 10:29 AM

#24

Ibrokespringfield

newbie

Join Date: Oct 2013 Posts: 18

Quote:

Originally Posted by The Financier

If you are doing listings just on eBay why not expand to other sites so you can turn over your inventory quicker?

We use other sites as well. Amazon for instance is a great platform for us to sell but your money is tied up for a minimum of 2 weeks and during reviews 4-6 weeks. If we have opportunities to buy 3-5k worth of phones per day the working capital require is substantial.

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10-18-2013 , 10:30 AM

#25

j20s

banned

Join Date: Sep 2012 Posts: 331

Quote:

Originally Posted by dp

how is this bad advice... Ny and LA are filled with wealthy people looking to invest...

And so is every other major city. What, do you think you get off the plane and there are people sitting there with cash waiting to give it to you?

The short answer is you don't know what you're talking about. You don't just "go to a city" or even arbitrarily contact people in major cities and figure that your work here is done.

It doesn't work like that and the greater point is that you haven't a clue what you are talking about. Sometimes it is better to give no advice than it is to give advice when you so clearly have no real experience or any validated insight.

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