Success in getting VC/private investor money?

[Whiteroom_Guardian]

I've essentially spent my entire life in kind of a weird industry. Many longtime mags have seen me talk about it on here. At this point in my life/"career" it seems that it's really all I am qualified to do.

I see an opening for a legit one of these businesses in this crazy growing valley. Several half asked shops here that I could do a better business than 100%. I'm actually trying to be hush about it now because some group of dentist will probabaly show up with 2M and make a go at it.

That's actually the reason turnover is huge in this industry. Lots of people with money think it's easy and build one with zero idea how to actually run the place.

Without knowing any millionaires how do you make the connection to potential investors? How do you shop around a business plan?

Sent from my SM-G930V using Tapatalk

[Mazderati]

Have you talked to a bank?

[Bunion 2020]

Dude you spend every day around billions of $$$ at the Y/C.

Buttonhole a couple of your clients and pitch them.

[Danno]

Shouldn't your meth production operation provide sufficient funding, Walter?

[El Chupacabra]

PM Rontele?

[AdironRider]

You develop an app that washes your car?

Honestly, for what you do, bank financing is going to be the way to go. Car washes aren't going to excite anybody. Put up that duplex as collateral, hopefully your credit rating is good and you have a couple hundred grand for down.

No investor is going to front you everything, you gotta bring something to the table other than it was your family biz growing up (still is? Cant remember).

[hatchgreenchile]

[MontuckyFried]

No investor is going to front you everything...

Unless you come up with some asinine invention like the smart "juicer". Then rich Silicon Valley investors are all over it. Seems the worse the idea, the more VC guys like it! Perhaps just attach "blockchain" or "smart" or some other trend to your idea's name, and you're in. Haha.

[fatnslow]

I thought you have family in the rub a dub business in NJ. Why not hit them up for backing in a partnership ? Can you make a go of roughly 2 M in debt with a population base of roughly 100K, half of them being rural ? How many cars per day will that kind of population average ? That's roughly 12K a month in interest alone at 7 % . I don't know how much the average transaction is at a modern car wash but you need to wash a lot of cars with add-ons to just service the interest. Probably not much fleet business in that area to take advantage of in that area.

[jackstraw]

Have you talked to a bank?

And when they tell you to screw there's always the SBA.

[evdog]

Do you know how much you would need to start up your own business? Have a realistic business plan?

Starting from scratch with your own money and build it up yourself is how I'd want to go, if you are able to. Keeps the decision making in your hands.

If you get outside investors involved you will lose some of your freedom and flexibility because they are going to want a return on their investment and possibly a say in how the business is run.

Approaching a bank with a solid business plan is a good way to go. Importantly, you may be able to negotiate funding without giving up much or any of a stake in the business. You could also look at buying into our buying out an existing business that is struggling. Every business owner will need to exit the business at some point. Even starting as an employee could work and then help build up a client base. Borrowing from friends or family is an option too, or partnering with someone who has the money but doesn't know the business.

[Mazderati]

And when they tell you to screw there's always the SBA.

The SBA doesn't lend money though, does it? Maybe the SBA puts the lendee in touch with a bank that offers SBA-backed loans, but any loan is still through a bank. At least that's my rudimentary understanding.

[alias_rice]

How much are you looking for, and what do you need to buy (building, equipment, working capital, etc.)? Bank financing is almost always a better option if possible. Lots of banks and credit unions doing deals these days. If you have decent credit and some home equity to tap into, most deals are getting approved.

When I’m not doing root canals I do commercial loans. Happy to answer any lending questions you have.

[PNWbrit]

Cars are going to become self washing soon.

[MultiVerse]

I've essentially spent my entire life in kind of a weird industry. Many longtime mags have seen me talk about it on here. At this point in my life/"career" it seems that it's really all I am qualified to do.

I see an opening for a legit one of these businesses in this crazy growing valley.

Can you demonstrate high rates of growth or tell a convincing story about about your idea's potential for growth? There's nothing wrong with starting a successful business but VCs aren't so much interested in a business per se as they are growth.

If you want to know the ins and outs of from a tech perspective then Y Combinator has a free online startup school: https://www.startupschool.org/

[jackstraw]

The SBA doesn't lend money though, does it? Maybe the SBA puts the lendee in touch with a bank that offers SBA-backed loans, but any loan is still through a bank. At least that's my rudimentary understanding.

Yeah, I'm not a banker and rules change, but you can get denied by the bank, then go to the SBA and they'll direct you to a CDC (certified development co.) of some sort who will broker the deal with the bank (in most cases) for you...if your business plan is strong enough. I believe CDC's create the buffer to stimulate some developement that the banks are too leery to touch.

[Whiteroom_Guardian]

Dude you spend every day around billions of $$$ at the Y/C.

Buttonhole a couple of your clients and pitch them.

I've seen 2 actual home owners in the last months. Seriously.

Sent from my SM-G930V using Tapatalk

[reckless toboggan]

iSmart AI BigData Blockchain Dentistry eSolutions

[Name Redacted]

Crowdfund it! Or go to the bank. Do you have a house or any other collateral? Liquid funds for down payments etc?

I have a friend who opened up a restaurant/brewery with 30 something investors. He was just desperate to see his dream through. DON"T DO THAT!! Been a nightmare for all parties involved.

[alias_rice]

Yeah, I'm not a banker and rules change, but you can get denied by the bank, then go to the SBA and they'll direct you to a CDC (certified development co.) of some sort who will broker the deal with the bank (in most cases) for you...if your business plan is strong enough. I believe CDC's create the buffer to stimulate some developement that the banks are too leery to touch.

You'll have as much luck going to the SBA for commercial loans as you will going to the DMV for a car loan. There are 2 main types of SBA financing: 7(a) loans and 504 loans. 504 loans are only done on real estate and other fixed assets, no working capital, etc. With a 504, the bank does a 1st mortgage for typically 50% of the entire project (including fees), the CDC and SBA both underwrite and approve a 2nd mortgage for typically 40% of the project, and you come in with 10%. That 10% goes to 15% if it is a startup, and up to 20% if it is a special use building like a car wash. That 2nd mortgage is then packaged with all other loans closed in the month and sold as a debenture to investors. With a 7(a) loan, the bank carries the entire balance, but the SBA guarantees 75% of the loan. Technically, you are supposed to come up with 15% down, but the SBA gives the bank leeway and you can actually get 100% financing this way. Small and medium banks love these loans because the 75% guarantee frees up capital and they can securitize it and sell it. If you have decent credit, I would be very surprised if you can't find someone to give you a 7(a). Just be prepared to get raped up front in fees and to have a variable rate in the 7% range.

[muted]

You'll have as much luck going to the SBA for commercial loans as you will going to the DMV for a car loan. There are 2 main types of SBA financing: 7(a) loans and 504 loans. 504 loans are only done on real estate and other fixed assets, no working capital, etc. With a 504, the bank does a 1st mortgage for typically 50% of the entire project (including fees), the CDC and SBA both underwrite and approve a 2nd mortgage for typically 40% of the project, and you come in with 10%. That 10% goes to 15% if it is a startup, and up to 20% if it is a special use building like a car wash. That 2nd mortgage is then packaged with all other loans closed in the month and sold as a debenture to investors. With a 7(a) loan, the bank carries the entire balance, but the SBA guarantees 75% of the loan. Technically, you are supposed to come up with 15% down, but the SBA gives the bank leeway and you can actually get 100% financing this way. Small and medium banks love these loans because the 75% guarantee frees up capital and they can securitize it and sell it. If you have decent credit, I would be very surprised if you can't find someone to give you a 7(a). Just be prepared to get raped up front in fees and to have a variable rate in the 7% range.

I thought you were a firefighter, maybe volunteer only?

I'm currently getting my shit together for my first commercial real estate loan, do you do those? Any books you recommend for any type of commercial loans?

[alias_rice]

I thought you were a firefighter, maybe volunteer only?

I'm currently getting my shit together for my first commercial real estate loan, do you do those? Any books you recommend for any type of commercial loans?

If you’re stuck in a fire and I’m your only help, you’re downright fucked. Must be someone else.

Probably 80% of what I do is commercial real estate but I don’t know of any books. There’s not a ton to it honestly. But I’m happy to answer any questions you have if I can.

[splat]

Cars are going to become self washing soon.

Yeah, but 16 year old cheerleaders will always be in demand and they require very little maintenance at that age.

[Bunion 2020]

I've seen 2 actual home owners in the last months. Seriously.

Sent from my SM-G930V using Tapatalk

I will let you know the next time Bill and Melinda are around.

[Skistack]

My uninformed suggestion would be to approach the other local operators about buying them out. Maybe somebody is ready to retire soon or change direction, maybe if they're as poorly run as you say they don't cash flow much and therefore are not worth much. They may not be ready to sell now, but introduce yourself, let them know you're serious and plant that seed. Follow up every couple months to let them know you're still interested.

And construction costs are cray-cray everywhere these days, you'd be at a significant competitive disadvantage carrying the debt service on a new facility.