There are many venture capital sites on the web claiming to put businesses in touch with investors and or brokers. from sites like Gobignetwork, Go4funding to Raise Capital and one called Find that Money. Well most may be legitimate some are there to just take your money for a subscription that does not give real leads.

Case In point one site in general I am going to pick on called Find That Money I recieve emails all the time from this site claiming that an investor wishes to invest money in my venture upon reading a recent email from a potentially investor I contacted his firm. (below is the actual email that was sent back to me )

Dear Mr. Riley,

Your email regarding the Findthatmoney.com website was forwarded to me. Unfortunately, Findthatmoney.com appears to be sending out fraudulent emails. Mr. Tennenbaum did not write the email that you forwarded and our firm is not interested in investing in your company.

Thank you for bringing this fraud to our attention. I wish you well in your business.

Liz Greenwood

So now you ask who is sending out the bogus emails and why are they committing acts of fraud by signing peoples names to emails they never wrote and sent and what does the law have to say about internet fraud.
good question. I was not shocked that it was bogus cause there are so many internet scams on the web but believe that these people need to be brought to justice for misrepresentation and internet scams so others do not fall into and maybe lose their money.

If you have had a similar experience please share your story.

Happy searching

Tim Riley

Bookmark It

Hide Sites

Once the You-Know-What hit the fan, people began pointing fingers at
mortgages brokers, bankers, lenders…basically anyone who was
originating loans. People were outraged. “They gave me a loan that I
could not afford!” they yelled “Banks are reckless, they knew I was
unqualified and set me up to fail!”.

Well folks, did you know that the Small Business Administation (i.e.
THE GOVERNMENT) offers the equivalent of sub-prime loans to small
businesses? And just like the sub-prime mess, SBA guaranteed loans are
now dropping like flies.

Here’s the worst part. Guess who is suffering due to all this
lending to unqualified business owners? The small business owners
themselves. People who put up cash, their homes, and offered their
personal guarantees are now facing bankruptcy or worse as their
businesses crumble. At a time when banks (ie prudent lenders) were
telling them no, the SBA (ie your government!) was inviting them to
borrower hundreds of thousands of dollars.

The SBA offers to guarantee debt in order to compel lenders to lend
to borrowers that they would not otherwise lend to. In other words, the
SBA promotes lending to unqualified buyers!

(Distressed Loan Advisors offer consulting services to small businesses, and can be reached at www.JasonTees.com)

Bookmark It

Hide Sites

• They formed their company 4 years ago and have generated less than $75,000 in revenue, in total, over that 4-year period.
• Over that time, they have lost/spent to twice that amount.
• They have been looking for capital since they formed the business (without success).
• They still have not penetrated their target market.
• They have serious competition (who has a lot more money and marketing muscle).
• They need capital.

Given the above points to consider, why would they turn down the money?
I understand the emotion that went into their decision. They felt that the investors had an advantage on them and was trying to carve out too fat of a deal for themselves.

Not an uncommon thing with angel investors and venture capital. This created an emotional response. But sometimes, in business, you have to take emotion out of the equation.
As an entrepreneur, creative person, inventor or developer of products there is basic question you need to answer:
Do you want to own a business or do you want to make money?
Most of us will acknowledge that owning, managing and building a business takes time, effort, commitment and money. Very often, a lot of each is spent over a long period. Just being in business does not guarantee you will make a profit or any money from it. Not everyone has the skills to be a successful entrepreneur.
Think about it.
If you are a creative person, inventor or product developer (or a savvy marketing person who can identify a niche and contract out the product development and retain ownership of the product) … are your skills best suited to start, manage and build a company?
Or are they best used to create and develop products?
Here’s another question to answer or consider:
Is it better to have 50% of something with value potential (and $500,000 in your pocket) … or 100% of something that has yet to develop into any value for you (and may not develop without capital)?
In my opinion, if you can create multiple products, putting forth the time, energy and money that goes into the part of the business that does not pertain to creating the products … is a dilution of your best value.
In this case, the investor apparently has the business background and ability to execute and get the product rolled-out and in the marketplace better than it has to date (or why put $500,000 into it). They can do something that the entrepreneur has not been able to do yet. They bring that value (along with the money).
There is more to check out, and specifically there are many ways for the entrepreneurs to protect themselves so that the situation is not a “predatory” one. But a licensing deal like this client prospect passed on would probably be the smart move to accept given their circumstances and that they do have several products developed and have future development capability. By accepting the deal, they can make money without further financial exposure.
This is something I discuss with clients and client prospects to help them prepare for such decisions: Bottom line (and this is a very important thing in business) entrepreneurs and start-up/early-stage business owners with products they have created as the basis for their business, need to think things through when making decisions about bringing in an angel investor and answer the questions:
Do you want to own a business or do you want to make money?
Is it better to have 50% of something (with financial backing to make it valuable to you) or 100% of something that has yet to develop and without capital may not turn into any value for you?
The answer to these two simple questions can dictate the success and financial rewards of your venture.

Bookmark It

Hide Sites

So if anyone can offer some advice or experiences I would greatly appriciate it.

I hope I am in a good situation because the line would be used to purchase wine which is very liquied in the event of failure they would have a lot of hard assets for a worst case scenario.

Thank You for any help

Alex

Bookmark It

Hide Sites

The bank has been hit hard by these types of commercial loans and are aggressively trying to clean up their balance sheet, thus the reason for this opportunity.

I have begun to look into the private equity, joint venture, and alternative financing market, however; this is the first time I have had to look in this direction, as my financing has gone through my bank for the last 10 years.

If anybody that knows a good network or source to reach reputable alternative funding sources, I would appreciate your feedback.

Bookmark It

Hide Sites

If you are closing your business, you should establish a plan. That
plan usually means working with your bank. Presumably, the SBA loan
you have is secured with the assets of your business. That can include
tables, chairs, ovens, sinks, etc. Before they will entertain talk of
settling your debt, your bank will first want to liquidate all the
collateral (the one exception could be your primary residence). You
need to contact your bank, explain to them that you have closed, and
you are willing to cooperate however you can. This will usually entail
the bank valuing the assets, and if they have value, they will sell
them and apply the funds to your loan balance.

Once the business is closed, and all the business assets have been
liquidated, you will then be eligible to submit an Offer In Compromise
(OIC) to the SBA. This is typically accomplished by submitting the OIC
through your lender. Your lender will review the OIC, then forward it
on to the SBA (Note: the SBA will want to know if you’ve been
cooperative, so play nice with your bank). It’s important to keep in
mind that if your home is being held as collateral, your OIC offer will
need to at least cover the amount of equity in your home. If you don’t
offer at least that, the SBA is likely to reject your offer.

If your offer is strong enough and the SBA approves it, once you pay
whay you agreed to pay to settle the debt, the SBA will release your
personal guaranty and any remaining liens on your home. Keep in mind
that if you are paying over time, these releases will only come once
you’ve paid the entire amount of the OIC.

(Distressed Loan Advisors offers consulting services to small business owners, and can be reached at www.JasonTees.com)

Bookmark It

Hide Sites