Hi, I'm Susan Schrader Welcome Today is going to be a really great day. It's about empowerment, your empowerment. If you have a business idea or 12 as so many people right here wanted to expand their business but don't have the cash to do it. We're going to show you how to get the cash you want on the best terms possible with the least amount of frustration. How cool is that? I guarantee, and I'll say that again, I guarantee by the end of these workshops you will have a much bigger sense of what you can accomplish in business, not just today, but over the course of your career, it's all about the process and feeling confident in your own business and what it can achieve. Now, I am sure there are people right here plus people at home who are saying, oh I'm not good at numbers. Well what I'm really good at is making the numbers easy and I know how you talk about numbers and how you feel about numbers will be a very, very different experience than anything you've ever had or experienced i...
n your business careers. It's what I'm known for. And I guarantee you, even though I teach at the NBA level, you do not need an M. B. A. To get funding for your business. We're going to cover credit cards, crowdfunding by the end of these workshops, you'll know the difference between angel investors and venture capital investors. You'll know the difference between donation, crowdfunding versus selling securities, selling a piece of your company online through crowdfunding. You're going to learn how to price loans, how to compare loans. You'll learn about micro loans, some of the lowest cost sources of loans in America, especially for people with bad credit and so much more. So let's get started a couple of things about me that wasn't mentioned before. I come from venture capital, which is really providing businesses um with capital plus also selling businesses. So we're going to learn how to create a business that is really going to grow in value, assailable value, but also over the last eight years I've been studying why startups failed and interviewing business owners all around the country and learning what was it that tripped them up. Some of them had growing customers customer base year after year, yet they went out of business, why? Some of them had amazing products. Why did they go out of business? And the answer is they ran out of cash. They simply ran out of cash when you're out of quarters, you're out of quarters. So kat, it's not about necessarily how good your product or services or not even creating a product that works. I didn't come across companies that didn't build the products they wanted, but they ran out of cash. Success or failure is truly having the cash to serve your customers and continue to build and expand. That's the heart of it. Cash. I think it's the best four letter word out their cash. I love it coming in. But companies close when they run out of cash, that won't be you because you're gonna become the masters of cash Empowerment slide # one I promised everybody that they would forever change how they think about what they can accomplish in business. And here's the heart of this understanding And this slide simply says there are only three sources of cash for a business and this applies to a startup business or a Fortune 1000 business. It could be apple computer, you name any company in the, you know the United States of the world. It's all the same. Where do you get your cash from? You either get it from debt, borrowing money. It could be from friends and family. You could even borrow money from your own personal savings account and put it in your business checking account. One source death, another source is equity. And that is turning to investors who will provide you with some amount of cash in exchange for a piece of your business. That's the second source of cash. So at the start up stage, it's usually a little bit of debt or a little bit of equity or a little bit of both. And guess what as you grow, same thing, debt fuels the business. Equity fuels the business or the cash flow that is generated from serving customers. Those are the Big three. And that's all it is. It's no more complicated than that. But somehow we get so scared about it. So let's make it a little easier way to think about it. Now I'm a mixologist, right? I love cocktails. I love recipes. Here's how I want you to think about your business and funding your business, not just today, but throughout your business career. It's never one or the other and we're all creative people. So if you are a painter, you may think of debt as you're creating your canvas, little bit of debt, a little bit of equity as your company grows. We're adding in that operating cash flow to the debt and equity. So changing our perspective is it's never one thing at all. That's your mindset change now. I do want to make a caveat here. Yes, we're going to talk about debt. Yes. We're going to talk about equity and how to master getting those sources of cash into your business. But I'd be really unfair if I didn't point out some other free sources of cash, right? I don't want you to become dependent on these, but they're out there for you, especially for start up entrepreneurs. First one S P. I. R. Federal grants you can get through any administration, Department of Agriculture, Department of Education. There are specific grant programs in the first year and these are for profit companies, not non profit. You have to be a for profit company to qualify for these grants. First year grant up to $100,000. Second year grant up to $500,000. Think about that. Okay. Department of Energy, Department of Agriculture, Department of Defense Department, every single department offers grants. So where do you go to learn about them? SB ir dot gov. Just type in S P I R and look at take your business what you know in the product or service category, especially on education. Look up what areas they are offering grants this year, apply for them. Free cash. Now you have to do some things for it. They're just not going to send you a check, but they want to help spur great creative, innovative minds, just like right here and are at home today, you do have to be a U. S. Citizen to apply for these. Okay, so that's place, number one donation crowdfunding is another place where you may be able to get sources of free cash. Now, if you're saying to yourself, I want it or your marketing a project in which people pay up front for a product. It's not really free cash because you're on the hook to provide that product or service. Right? And we're going to talk a little bit more about crowdfunding a little later, but I want you to consider that you may be able to turn to crowd donation, crowdfunding sites and pony up an idea or an opportunity where people either donate to your business or advanced purchase for your business. When I work with a lot of startup entrepreneurs, they're always afraid to ask for freebies. Suppose you need warehouse space before signing a lease for warehouse space. See if somebody might lend you or give you a little piece of their warehouse space for free. If you are starting a service business, see if asked people around you, do they have an office where you can incubate your startup idea. First, my rule, whenever you're asking for free products, services, space is not make it forever. The very best way to get a yes is simply to put a timeline on it because then they're more likely to say yes. So you say for six months, can I use your warehouse while I get my business going? Free source striking better deals with vendors. If you don't ask, you don't get sources of debt and equity. Obviously you and I've heard this morning that several of you have really funded your own enterprises, right? So for either equity or debt, you can put money into your business in either way. But so can I outsiders. Those are your sources. What is the key advantage of using debt versus equity? Number one, it is generally available? Um, all across the United States, lots of lenders. New sources of lenders opening up online. Um, so there are many more sources easy access sources of debt versus equity. You usually don't have to share a piece of your company when you turn to lenders. So if you really care about owning 100 of your business, always then for the most part you're going to be playing ball in the debt world. Those are going to be your sources of cash until your company has enough customers to pay the company's bills. Debt is a wonderful short term source for riding out problems of just paying bills. It gives you a little bit of extra firepower to pay your bills to work with vendors to market your products and services, great opportunities here. But the number one is, you don't have to give a piece of your business away to lenders. There are a few exceptions where an opportunistic lender may say gee, this is pretty high company, won't you give me a little slice of your company? So I'm not saying they won't ever ask to own a piece of your company, but for the most part, that's not what they do, that's not what they care about. And for ambitious thinkers, while most people think debt is for the short term needs, let's think bigger. Let's say you want to have your own film studio, let's say you want to set up your own education centers. There are a number of programs we're going to talk to about today, where you can get money to buy the building, to build out the musicians studio, the film studio, the art studio. So again, just because you don't have it today, but you have a dream doesn't mean it can happen. What's the key difference between lenders and investors in terms of their own mindset and thinking lenders, our short term thinkers, they need a steady payback, right? They're not big risk takers, they want to get introspect from you either on a monthly or quarterly basis. They want to know when they're going to be repaid. Investors are a little different breed of cat. They are not interested in getting interest and small amounts back from you in the next quarter and they're not going to say to you, when exactly will I get my money back, lenders will ask you that question Investors. They have a much longer-term horizon. They may not need their money back for a good 5-7 years, right? Some other things, cash flow, predictability. They do want to know that source of cash. They want to know where your customers are and how fast those customers are paying you investors. If you have a big idea, it's entirely possible, let's say for a biotech or clean tech operation or a product that takes a lot of development time, you may not have to have a customer for four years, five years, seven years. But still investors will believe in you. That's not the kind of scenario that would make a lender very happy, Right? But here's the biggest difference between lenders and investors that I want you to really appreciate. And that is because I'm here to protect you and help you understand the pros and cons of all your different funding options out there because you are going to become great shoppers for cash, Right? That's what I'm creating here. By the end of these workshops, you're going to be awesome. Shoppers for cash. The big difference between lenders and investors, if your business opportunity, for some reason doesn't work out and it's sort of outside of your control, lenders will probably turn to you personally to be paid back investors not
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Susan Schreter is a veteran of the venture finance community with expertise in the life cycle of financing companies from startup to sale. She is an MBA-level educator, expert on the factors that influence startup success or failure, and popular