Tag Archive for 'investing'

RESULTS: Would your business be a prospect for outside investor capital?

The Question:
Would your business ever be a prospect for outside investor capital?

15% - Yes, our long-term growth plans is to acquire venture capital.
8% - Yes, but only angel investors we can buy out later.
0% - We want to acquire investor capital but don’t know how.
0% - We’ve already acquired outside investor capital.
77% - We don’t need no shtinkin’ investors.

Jim’s Comments:
As I’ve said - and written - many times, most small businesses are not prospects for outside investor capital. It’s difficult to get, it’s not practical to manage, it’s troublesome to account for, it can be maddening to deal with the investors, and the long-term expectations of the founders and investors are almost always different. So I wasn’t surprised when over three-fourths of our respondents said, “We don’t need no shtinkin’ investors.” And I wasn’t surprised that 15% said they were planning to pursue outside investors in the long term. But I’ll wager that of that group, a very small percentage will actually finalize an outside investment capital deal.

When you get a few minutes, go to this link and read some of the articles on capital acquisition.

Thanks for participating this week. And be sure to give us your position on our new poll below.

Three fundamentals of small business capitalization

The first sentence in the job description of every CEO should be, “Get the capital your company needs.”

Webster defines business capital as, “any asset, tangible or intangible, that is held for long-term investment.” Capital blended with operating cash flows becomes the financial fuel your company’s engine uses to operate with and fund growth.

•  Investment Capital — from you or someone else.

•  Borrowed Funds — for most small businesses, from a bank loan.

Additional capital is required just to STAY in business beyond what was necessary to START the business. And the stay-in-business capital is much more than the get-in-business capital. Success begets growth and growth eats capital like Cookie Monster eats chocolate chip cookies. So without a capitalization plan you can grow yourself out of business.

Here are three capital allocation guidelines. Don’t use operating cash to purchase assets. Don’t borrow money for operating expenses. Funding growth with borrowed money is okay, if you have a plan to convert growth funding from debt to retained earnings.

Retained Earnings

As the CEO or your business, it’s your job to acquire, manage, allocate and maximize all sources of capital.


Jim Blasingame is the author of the new book,”The Age of the Customer: Prepare for the Moment of Relevance.



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