Where To Find Investors For A Business - Newly Formed Corporation..

by PR0VIDENCE Banned
24 replies
I am a former student who has been working as a part time web developer for a number of years now. Having completed my schooling using my income as a developer to pay my way, I believe is proof that I have what it takes to run a successful business and I know that this is what I want to do for a living.

While in school and working, I established my brand, blogged my way to popularity in Google and perfected my marketing strategies. I have also
developed a small client base (all that I could handle given the constraints of higher education). I have literally prepared my business while in school for success once out of school.

Most recently (August), I have established my company as a S-Corporation and I am now looking to take on the world.

So I am seeking to grow from "an army of one" and in order to do so, I believe that the most appropriate course of action is to seek outside financing.
__________________________________________________ ________________________________________

My question is: "How do I proceed?" So far I have thought of the following:
  • Bank loans: though I have not been successful in finding loans from the banks: it seems loaning money is not something US banks are doing much of at the moment.
  • Selling stock in order to grow the company, and then buying out the holders at a later date.
  • Maybe there are places such as "Kick-Starter" that are more focused on business types instead of creative projects... not sure.
  • Short term - high interest loans from other Internet marketers. Say - 30% over 3 months.

Where have others found short term investors (other than here) for business launches and expansions and out of the ideas above, what would you all consider the most feasible?
#business #corporation #expansion #find #formed #investors #newly
  • Profile picture of the author TolyZ
    How much are you looking for? pm me.
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  • Profile picture of the author Rbtmarshall
    You live in Beverly Hills and are asking how to find investors, all the while hyping yourself and your business acumen? Do you have any family members that could give your business a seed loan?

    With anything other than a single owner LLC you are going to have corporate taxes along with personal income taxes that you pay yourself from the corporation. So, you will be paying taxes on the income twice. Eventually it may be a non factor, but starting out you have to be able to answer to yourself if it makes sense.

    Banks are reluctant to loan to people without assets anymore or based on hypothetical projected earnings. The number of defaults on home mortages is the blame for that change of policy. Banks want something tangible to back their loan in the event of business failure
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    • Profile picture of the author PR0VIDENCE
      Banned
      Originally Posted by Rbtmarshall View Post

      You live in Beverly Hills
      Now, I live in the Vally. "Beverly Hills - That's where I want to be" - Forward thinking courtesy of the band Weezer.

      Originally Posted by Rbtmarshall View Post

      Do you have any family members that could give your business a seed loan?
      No. And I know the banks are hesitant toward loaning these days... which is for the greater good, but is also a hindrance to people like me.
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    • Profile picture of the author myob
      Investors want to see collateral or significant capital input. This website may be helpful. Also look into a local chapter of the SBA to see if you may qualify for a small business guaranteed loan.
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      • Profile picture of the author PR0VIDENCE
        Banned
        Originally Posted by myob View Post

        Investors want to see collateral or significant capital input. This website may be helpful. Also look into a local chapter of the SBA to see if you may qualify for a small business guaranteed loan.
        Thank you.
        This looks very much like something that may be of help to me.
        I am in the process of developing much of what I need in order to work with a company of that nature.
        http://www.gobignetwork.com/learn/bu...or-fundraising
        Having branded my company with an established my web presence and Incorporated, I am on my way. I have also spent quite a bit of my own money accomplishing those tasks. That's what has brought me to this point.
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    • Profile picture of the author seotothecore
      Banks do not loan money because they can borrow it from the fed for nothing and lend it back to them for more, no joke. They don't need your interest unless they have assets to rip from you.

      Your best bet to get into business is to get a VOIP phone and start calling people locally. If your looking for a loan from someone here and are offering to pay out at 30%, then your probably Charles ponzi's idol.
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      • Profile picture of the author Rbtmarshall
        Originally Posted by seotothecore View Post

        Banks do not loan money because they can borrow it from the fed for nothing and lend it back to them for more, no joke. They don't need your interest unless they have assets to rip from you.

        Your best bet to get into business is to get a VOIP phone and start calling people locally. If your looking for a loan from someone here and are offering to pay out at 30%, then your probably Charles ponzi's idol.

        Even if it wasn't a ponzi scheme. 30% interest charged and/or received for a loan is probably going to be illegal for both party's involved.

        Check the Usury laws for your state.


        ex: here is the California usury law http://oag.ca.gov/consumers/general/usury
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        • Profile picture of the author PR0VIDENCE
          Banned
          Originally Posted by Rbtmarshall View Post

          Even if it wasn't a ponzi scheme. 30% interest charged and/or received for a loan is probably going to be illegal for both party's involved.

          Check the Usury laws for your state.


          ex: here is the California usury law Usury | State of California - Department of Justice - Kamala D. Harris Attorney General
          You really shouldn't have enough information to form an opinion of such gravity. That site is quick to state "there are exceptions". But to the point: my corporation is a "foreign entity" registered in another State and operating in CA.
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          • Profile picture of the author Rbtmarshall
            Originally Posted by PR0VIDENCE View Post

            I see that you have an based on (30%) and that's about it. You really shouldn't have enough information to form one. That site is quick to state "there are exceptions". But to the point: my corporation is a "foreign entity" registered in another State and operating in CA.
            I doubt that any startup is going to justify itself in order to qualify for any of the exemptions.

            here is a link to examples of who may be exempt.

            http://www.nvlawllp.com/publications/CAUsuryLaws.pdf


            If you're a resident of California and conduct your business in another state, when/if CA finds out you will still have to pay the franchise tax board fee and then register in Cali.

            I'm not a lawyer and I'm not saying you will get caught, but it could be a form of tax evasion.
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  • Profile picture of the author WarrenPeterson
    Without knowing any more than what you have posted here; you likely will only have one real option. You are going to have to give up a big chunk of equity and get a partner.

    Banks will not make these kinds of loans, even in the late 90s this would have been tough; today it isn't even an option. You need to expand your personal network until you can find someone who is willing to take the risk, but that same person will also expect to be compensated. People are not banks. They don't loan money on the hope of a percentage return, you can do that easily elsewhere.

    Loaning money to a person (other than a direct family member doing it for help) is done for the massive upside potential. They will want equity, and not just a point or two, but real equity. If you are looking for an amount that the investor (not you, the other person) considers to be a high number in relation to the risk level, expect them to be looking for a high amount of equity in return, often they are looking for over 50%.

    If you have pursued every personal lead to every possible conclusion, and have no one, then your next step might be to find a local Angel Investor group. Just be prepared. Their business is to invest in companies that will make them money, they are also not banks making loans.
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    • Profile picture of the author Horny Devil
      Banned
      There is a Classifieds section and a JV section on here where all sorts of people are looking for all kinds of ventures, at all levels of investment or input. That's where you ought to be strutting your stuff to experienced warriors who would be an asset to your business, and not hocking your ass to a bank. Otherwise the main forum would quickly become cluttered with 'investment' threads.

      But then again you'd know that having been a member for over 18 months. I guess you'd also know that there's a small price to pay for posting there. But there's nothing like a free lunch, hey!
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  • Profile picture of the author mikemcmillan
    Providence,
    The one thing you didn't mention is what you wanted the money for. There is so much that can be done in IM with next to no money, I was just curious about what you would do with it if you got it.

    Without knowing anything else I would be very, very careful about borrowing. I've seen many people give up significant parts of their business and gotten into the position of working their ass off without hopes of getting back into the black after going into debt.

    What's between your ears is no doubt worth far more in terms of growing your business than a fat checkbook. Good luck, though! --Mike
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  • Profile picture of the author Randall Magwood
    Do you want investors who want to invest in the 30% ROI business opportunity?
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    • Profile picture of the author PR0VIDENCE
      Banned
      Originally Posted by Randall Magwood View Post

      Do you want investors who want to invest in the 30% ROI business opportunity?
      This thread in particular is more about discussing all of the available options, but that is most certainly one of them I would be happy to discuss with you in PM.
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  • Profile picture of the author Troy_Phillips
    With s-corp status, if I am not mistaken, you have 100 shares to work with. Get the business in profit mode (that you can prove) and sell shares.
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    • Profile picture of the author PR0VIDENCE
      Banned
      Originally Posted by Troy_Phillips View Post

      With s-corp status, if I am not mistaken, you have 100 shares to work with. Get the business in profit mode (that you can prove) and sell shares.
      Yes you are right and thank you for your thoughts. That's what I was thinking. I could provide proof that my business is indeed profitable. Obviously selling the stock would be used to grow the business.
      Is it possible to make a stipulation in the sale that there must be an option for the company (me) to buy the stock back after a certain amount of time and at a set ammount?
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      • Profile picture of the author Troy_Phillips
        Originally Posted by PR0VIDENCE View Post

        Yes you are right and thank you for your thoughts. That's what I was thinking. I could provide proof that my business is indeed profitable. Obviously selling the stock would be used to grow the business.
        Is it possible to make a stipulation in the sale that there must be an option for the company (me) to buy the stock back after a certain amount of time and at a set ammount?
        You can stipulate that the buyer must sell back to you at market value if they sell but a forced takeover at s-corp level, if I understand correctly, is not legal.
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        • Profile picture of the author PR0VIDENCE
          Banned
          Originally Posted by Troy_Phillips View Post

          You can stipulate that the buyer must sell back to you at market value
          That sounds like it may be a winner.
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  • Profile picture of the author Andres1986
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      • Profile picture of the author Andres1986
        Originally Posted by salegurus View Post

        So, where the link to this forum so we can check the story?
        Just google his old username and add the word "scam" to it. You'll see what this scammer has left behind.
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        • Profile picture of the author salegurus
          Originally Posted by Andres1986 View Post

          Just google his old username and add the word "scam" to it. You'll see what this scammer has left behind.
          OK, see what you mean.
          But why (If it's the same person) would he be such a dumb-ass and use the same username?

          Edit: OK, i see it was changed from EnlightenedOne to PR0VIDENCE
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  • Profile picture of the author foomenow
    What market are u entering & how much seed money are u looking for and what is the ROI?
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  • Profile picture of the author seasoned
    "PROVIDENCE", If you were telling the truth, you would be HOME FREE! The very fact that you are here asking such a thing with such a story, screams SCAMMER!

    I watched the show "shark tank" a few times. You know what the investors asked 50% of the time? *************WHY************! And 50% of the time the answer they got back was basically that the person was a SCAMMER! Almost 50% of the time the answer was STUPID! Maybe 10% of the time the answer was that the guy needed help BAD! YOU claim you are NONE of the above. HARD TO BELIEVE!

    BTW the scammers they told to GET LOST! The STUPID people they told to give up, or work harder. They only helped about 2 of those that needed help bad.

    Steve
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  • Profile picture of the author sbucciarel
    Banned
    I'd keep my money in my own accounts on this one guys. Per post #20 above, there is a JV scammer that scammed people out of thousands on BHW. They posted a link to the WF that shows that the person here named PROVIDENCE, was using EnlightenedOne here on the WF. EnlightenedOne has been banned from BHW for scamming people out of money on a JV offer.

    You can see in this thread
    http://www.warriorforum.com/internet...ml#post5866120

    that someone quoted him when he was englightenedone.

    Google EnlightenedOne scam and you can see the BHW thread about it.
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  • Profile picture of the author impro42
    Get a good business plan and find some VCs
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