So, what advice would I give on obtaining financing?
Google it. Seriously.
Here you will find every relevant link to every institutional option available to you, both nationally and locally. You will find everyone from the major banks to the BDC to the Canada Small Business Financing Program. Unfortunately, here is where you will discover what you already know: unless you have a high net worth, equity you can leverage and an excellent credit rating, easy financing just isn’t in the cards. But there’s good news – this isn’t the end of your dream!
Assuming you have a fantastic business plan, industry experience, and invested all of the personal savings you could afford to part with, and your bank has (politely) said no to your request for the 18 months of seed money you will need, you only have a few more options: bootstrapping, grants, and Angel investors.
Bootstrapping is the process of building a business in your spare time, with little or no money, slowly chipping away at your solution and the market you are trying to disrupt. It is as awful as it sounds. We did it for about a year. It’s stressful and exhausting. However, if you have a solid business plan, huge market potential, and a great group of partners who share your vision, it is what you must do to get you to the next stage.
I wish someone had told me to look into what grants were available far earlier. When we did start actively pursuing all available options, we were successful. It wasn’t a ton of money – nowhere near the 18 months that we needed – but it definitely helped. Start looking at your options – immediately.
Angel investors are high net worth entrepreneurs looking for investment opportunities with a high reward potential. Guess what – they love risk! Your business was made for them. They are looking for the opportunity to get in early on the next big thing. You are this next big thing – and you better believe that or you are wasting everyone’s time.
Get your pitch deck in top shape, practice your story, tap your social networks, and start looking for them. Everyone knows at least one successful person. Call them right now. Pitch them. The worst thing that can happen is that they say no. Most likely it will lead somewhere – a face to face meeting, an introduction to another Angel, or at the very least some great insights that will help improve your pitch for the next Angel you end up in front of. Also, make sure your online presence – including LinkedIn – is up to date and looking great. This is where angels will backchannel you.
Finally there is an incredible new platform out there designed to help the new entrepreneur get advice from those who’ve been successful before – Clarity.fm. Whatever insights you need, you’ll find someone there who can help, and is willing to book a call with you. I am a member. So if anyone wanted more information on how to pitch an angel investor, for example, I’d be available. I seriously would love to help out in any way that I can.
*This article originally appeared as a guest column on InsideToronto.com