Finding Investors

[elkaholic]

I am retiring from the military soon, and want to own my own business. Now, getting a veterans business loan is fairly strightforward for small amounts.

However, the company my brother works for is under receivership, and has been for quite a while. I would love to buy it, but need to find some investors that are willing to loan me a sizable amount ($8-9M), with a 10 year return on investment.

Does anybody know how to find investment groups, or someone willing to take a chance on a proven company?

Thanks,

 

[ouch]

Put me down for 5 mil.

 

[raisindot]

If it's a proven company, then why is it under receivership?

And if it's a proven company, why would anyone loan you the money versus buying it themselves from your brother? What qualified you to run the company?


Not meaning to be hard here, but as someone who has worked for several startups, these are the first two questions any potential investor, whether an individual or fund, would ask.

Before you even think of seeking investors, you need to put together a totally detailed business plan that can stand the scrutiny of anyone considering investing. This means listing all assets, sales, revenue, capital assets, debts, profits, liabilities, etc. This means demonstrating, through market research and past results, that this business has been profitable and can continue to grow. This means presenting your proposed corporate structure, including key employees, along with their qualifications.

Only when you have all this information available, both verbally and in a detailed written report, should you even consider thinking about outside investors.

Jeff in Boston

 

[ackvil]

If it's a proven company, then why is it under receivership?

And if it's a proven company, why would anyone loan you the money versus buying it themselves from your brother? What qualified you to run the company?


Not meaning to be hard here, but as someone who has worked for several startups, these are the first two questions any potential investor, whether an individual or fund, would ask.

Before you even think of seeking investors, you need to put together a totally detailed business plan that can stand the scrutiny of anyone considering investing. This means listing all assets, sales, revenue, capital assets, debts, profits, liabilities, etc. This means demonstrating, through market research and past results, that this business has been profitable and can continue to grow. This means presenting your proposed corporate structure, including key employees, along with their qualifications.

Only when you have all this information available, both verbally and in a detailed written report, should you even consider thinking about outside investors.

Jeff in Boston

+1. You must have a sound business plan with detailed financials on why you can make this a success when others couldn't. I can tell you from past experience, that this is NOT an easy task, particularly with today's economic conditions.

 

[Go West Young Man]

Check the business school at local universities, they're usually plugged into the business community as they try to place graduates and get internships for students. You might even be able to convince someone to make your business plan their final project.

Banks, Chamber of Commerce and Small Business Associations should be able to help you out too.

 

[chickpea]

I am retiring from the military soon, and want to own my own business. Now, getting a veterans business loan is fairly strightforward for small amounts.

However, the company my brother works for is under receivership, and has been for quite a while. I would love to buy it, but need to find some investors that are willing to loan me a sizable amount ($8-9M), with a 10 year return on investment.

Does anybody know how to find investment groups, or someone willing to take a chance on a proven company?

Thanks,

Thought better of this post, PMing you.

 

[elkaholic]

Didn't want to go into too many details before, but...

It is in receivership because the previous owner was embezzling finds and trying to take out fraudulent lines of credit, not because of anything to do with the company or its workers. My brother does not own it, he is still working there, like the #2 guy.

This is the type of busines that would be almost impossible to get a return on investment within 2-5 years, which is why most investors have passed on it. It is a strong, stable, local company that does business nationally and internationally, in its own small niche.

Part of my problem is that unless I can prove that I have someone willing to invest the money, the receiver will not give me a package to put together a business plan with. I know I need a plan, I was just wanting advice on where to find investors.

Thanks for the comments.

 

[DavyRay]

There is an even deeper question here.
What is in it for you?

I ask that because the most obvious answer is not going to work at all.

Let's assume that you put a deal together. You do the footwork and write a great business plan. The only trouble is, you are not investing the bulk of the money. Unless you can find idiot investors, they will own the company, not you. The people who put up the most money expect to have the controlling interest, operational control, and the bulk of the profits. You will be lucky not to be cut out of the picture by the time the ink is dry on the papers.

If you have friends who have enough money to make this work, you may be able to depend on their sense of fairness. But you would not be asking how to find investors if that were true.

For some light reading, try "Barbarians at the Gate: The Fall of RJR Nabisco".

 

[ctr]

I am retiring from the military soon, and want to own my own business. Now, getting a veterans business loan is fairly strightforward for small amounts.

However, the company my brother works for is under receivership, and has been for quite a while. I would love to buy it, but need to find some investors that are willing to loan me a sizable amount ($8-9M), with a 10 year return on investment.

Does anybody know how to find investment groups, or someone willing to take a chance on a proven company?

Thanks,

Please don't take this the wrong way, but are you getting in over your head? Buying and running an established business that is doing well is tough enough. Taking over a business in trouble and saddled with debt is precarious unless you are a turn around expert.

Attracting investors requires a sound business plan, an experienced management team, and a superior presentation. Without a track record, the deck is stacked against you. Also unless you are all in most won't talk to you - are you prepared to put your house on the line? How about your retirement assets as well?

 

[johnmrson]

I think the only hope you'd have for that sort of money would be with a venture capitalist fund who are generally more willing to look at riskier investments for a higher return.

 

[rickboone1]

Put me down for 5 mil.

+1 if you take checks.

 

[ackvil]

I think the only hope you'd have for that sort of money would be with a venture capitalist fund who are generally more willing to look at riskier investments for a higher return.

+1. Take a look at the WSJ where there are ads from venture capitalists looking for investments. However, you will still need a sound business plan including financials to get their interests.