Saturday November 21, 2009

smSmallBiz.com - SmartMoney's Small Business Site

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Raising Money to Grow in Current Climate
Before buying another business, assess your company’s ability to survive a potentially prolonged downturn.
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Brian of MyOnlineToolbox Posted: 9:35 PM On February 11, 2009
I am in the repair & remodeling industry with a software-as-a-service collaboration platform called www.MyOnlineToolbox.com. The more relevant point is that we are investor financed (via sophisticated angels) & have been positioning for early stage VCs as our company has been growing. It is important when referencing VC financing that 1) VCs will usually only invest in scalable businesses, 2) can eventually produce a strong profit margin, and 3) have a clear exit strategy. The company mentioned in this article, while successful, will most like be viewed as a labor intensive business that may not be positioned for scalability. While I may not be able to suggest all the alternative financing options, I would suggest shying away from the VC approach unless you have a clear exit in mind. And separately, please list your company on our platform in order to be seen by other contractors who may need your services. Give me a call if you would like further elaboration.
Yiannis Posted: 3:38 AM On January 8, 2009
Very good overall advice. I do agree. I disagree about business brokers. Although it is true that most business brokers would not take an assignement to find investors, some do and are extremely competent. There are brokers who specialize in helping companies grow through acquisitions. My advice would be to go through the IBBA brokers (www.ibba.org, click on find a Broker) and find out if there is one in your area that would handle this kind of project.
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