The Almighty $ or How to get Investers

imaguitargod

imaguitargod

Well, it's a sad thing to say, I saw it coming a year ago and now it's here... I'm doing my homework (with my partner in crime, Dave) and going into business with a hot product (3 to start out with). Now since I don't have the $5,000 or so to start the ball rolling, I will need investors. Any tips or hints?
 
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put me in for another $20 Bro, grass roots, blind a** entrepreneurial Spirit shit works too (with heap big dedication). If you put half the dedication into your venture as you do your attentiveness to this board…I’m in! Now you only need another 125 Hillbillies
 
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imaguitargod said:
Well, talked with Dave and he would like to try to avoid the bank loan stuff. So were back to the investor idea. Has anyone delt with investors before?
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Hmmmm, starting up a company from the start with investors. Not a good idea. You'll find very quickly that investors want a return on their investment rather quickly. Starting a hot sauce company is not a very good venture for making quick money. Also, the investors will have legal say in how you run your company. Far be it for me to tell you how to go about the start-up, but at least with the bank, you still maintain complete control over the internal logistics of your own idea.
 
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DEFCON Creator said:
Hmmmm, starting up a company from the start with investors. Not a good idea. You'll find very quickly that investors want a return on their investment rather quickly. Starting a hot sauce company is not a very good venture for making quick money. Also, the investors will have legal say in how you run your company. Far be it for me to tell you how to go about the start-up, but at least with the bank, you still maintain complete control over the internal logistics of your own idea.
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Hmmmm....you make a really good point...:think:
 
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DEFCON Creator said:
Just food for thought. Investors are like the little devil on your shoulder, and can grow in size when the profits aren't rolling in to feed their insatiable appetites.
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We actually had a couple of people who wanted to "invest" in our custom shop. Jamie and i thought it over and decided "HELL NO". We figured we'd have better chances dealing with a bank. And it turned out to be true, because a couple times a year our business basically falls flat on it's face, and we didn't want to be dealing with what you described above. Besides, as Jamie had said, "i don't want to have to kick the a** of someone i owe money to".
 
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Actually Creator we had bunch of people asking us if they could be investors in our company...but as you sayd they are little devils on your shoulder waiting for the return...plus i do not like to play with somebody's also money either..so DEFINITILY a no go..!!! too devilish...:think:
 
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Yeah don't sell yer soul to investor's in this business. If at all possible, avoid borrowing any money. It may take a bit longer for things to get rolling without a loan, but the initial slow growth will provide the opportunity for you guys to get creative in the "how to's" of making your venture move ahead, and the experience will come in handy during the slow times that you'll be faced with from time to time after you're established. You'll be suprised how far you can stretch a dollar if you do your homework. And did I mention BARTER! It's amazing how many folks that are willing to trade their service for some talent that you may have. You have mentioned that you do Graphic's work. Use that experience to your advantage. Just trying to throw some ideas you way Jon. Hope it's helpful...
 
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Cap'n, good advice. Jon, don't feel you have to jump right into this. I would suggest making a few test batches, and sending them out to people who want them, or do what I did, go to local watering holes, and just have friends and friends of friends taste the stuff. It's a great, and inexpensive way to at least test market. In the mean time, you'll be saving your pennies. In my case, I had actually been making my wing sauce for nearly 15 years before entering the market. The thought of entering the market never even entered my head until a little over 2 years ago. However, in that time, and many Superbowl parties, I was able to tweak the recipe to what it is today, thanks to the most awesome test market there is, a bunch of drunk idiots sitting around watch the Superbowl...If something sucks, they'll be the first to tell you, and they did.
 
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OK.. back on topic.... I have to agree with what's been said. START SLOWLY..... I am going through it myself right now. Thought I knew what I was doing and went 90mph at this thing before I was swamped for all sides. Trying to take over the world in a week :lol:

I've slowed myself way down, and things are goin much better. If $$ is an issue, I agree with what's been said - no investors at this point. Just proceed at a pace that makes financial sense (and dont use cc's to finance it!)

just my 2c.....
 
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imaguitargod said:
Well, it's a sad thing to say, I saw it coming a year ago and now it's here... I'm doing my homework (with my partner in crime, Dave) and going into business with a hot product (3 to start out with). Now since I don't have the $5,000 or so to start the ball rolling, I will need investors. Any tips or hints?
Click to expand...

Man - think this move over really well before you pull the trigger! You are a dyed-in-the-wool chilihead with a love for the burn. Most investors you solicit are not going to give a fig about the product or the industry. They will want to know what is the risk:reward ratio. They will be primarily interested in just one thing - what is the return-on-investment and how soon will the ROI bucks begin to flow. If you can do this without O.P.M you are much better off. Trust me, a marraige is easier to manage than a partnership with investors. And we have not even talked about ULOR filings under the Blue Sky laws or filling our annual K-1 reports! I did this once in my ignorant youth and it was a nightmare before I managed to extract my fat from the fire. The business didn't survive the financial chaos.
 
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Hi, everybody!

I'm Dave, imaguitargod Jon's friend looking into the new products. My father was in food pac kaging for his whole career - big time stuff. We'd thought of the product liability insurance, co-packing (no doing it at home - commercial producers, FDA approved packers, etc) and using friends and acquaintances for test marketing. Hell, THEIR positive comments was how we thought of this to begin with.... As for market research, we've looked around the markets (Ralph's, Von's, etc.) and find nothing else like it

Even found a couple co-packers, one will even do the lab testing. Bar code is no problem either. Can be had comercially for $50 or I have a friend who bought 10,000 and can get one or 10 for free, provided they are the right type Labels? We are graphic designers.

We're working on the recipe a lot, and it comes down to $ and availablity of the right raw materials. After the recipe is set, a co-packer for a "test run" of a few hundred bottles. Standard bottles, average labels (not die-cut) and we're off the the races. Oh yeah, PRODUCT LIABILITY INSURANCE!!!!

The questions are mainly how much $. Don't know yet. Private investors can come in many types, friends with lots of cash is a good one, especially if they don't want a "cut of the deal". It seems that most of the previous posts about them is they are the "perpetual profit participant" variety. I think we're more in the market for a "%150 return on investment" kind, with no special schedual in mind. How easy that is to find will be determined by our further research into the costs of production of the "test run", which will become more clear as we work on it.

Keep those cards and letters coming! All input is good!!!!

Dave
 
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