John Demer: Financing your business

John Demer: Financing your business

John started with a goal: make boatloads of money

How do you do it? Own your own business. But not just any business it needs to be one that produces a product. John arrived at this point by learning as much as he could from the jobs that he worked at. He started out at a bank then a bonding company until he went into business with a friend and made the big money but that did not hold his attention. He stayed retired for 2 weeks then went into investing.  John Talked about having a plan: Why are you in business, tell the truth and focus on that goal. Have an exit strategy, how will you get out of the business. Once you have the plan and the strategy how are you going to finance it? Unless you are independently wealthy you are going to need money. Businesses grow in stages and financing needs to be thought of in terms of how do to get to the next stage. Your business is a pie how much are you willing to give up to make it happen. John advised us to link the outside funding to Objectives that you reach along the way.  Basic funding looks like this:

            -VC capital (visa capital)

            -Friends and family (based on their faith in you)

            -Angel investors

            -Venture Capital

            -Government grants + loans

John pointed out that this cycle is not linear (it is a cycle). The best investment is one that you do not have to give away equity. 

John focused on Angels and their part in the lifecycle.

Angels are people who have been in business and are at the point where they can invest what they have made. They are still looking for that thrill of being in the game.

Every community has an angel group even if it is not called that. You probably know of some and you do not realize it. Angel funding is the step after you have put in your money and your friends and family, and you need that next step.

How to get angel funding:

            -Apply to present at an angel meeting

            -Have a business plan

            -Financial statements

-Know the market valuation of your company and be prepared to defend why you

 think your company is worth what you think it is.

            -Be prepared