Venture debt and venture lending are two types of debt financing. Goldmount Financial brokers venture debt and venture lending sought by start ups, mining companies, manufacturing firms and other medium sized enterprises in Vaughn and across Canada. They help out firms that need money to grow larger but currently do not have positive cash flows or significant assets to use as collateral at banks. Such funds are provided to venture-backed companies by specialized banks or non-bank lenders to fund working capital or capital expenses such as the purchasing of work vehicles or other big pieces of specialized equipment.
Start-up loans are often quite risky for the investor and therefore usually quite hard to get from banks which are rather risk adverse these days. Unlike our nation’s banks and credit unions, venture loan providers will accept more risk, but they expect greater interest rates and warrants, or rights to purchase equity, to compensate for the higher risk of default. Alfredo Malanca, the CEO of Goldmount Financial offers some sage advice on attracting VC investors to help fund your next business enterprise. Know your debt ceiling and optimal debt financing arrangements Before you attempt to get a venture capital investment, be sure you understand your personal financial situation and seek 3rd party validation of your holdings and plans. The amount of money a VC investor is willing to lend, is not necessarily the amount you can afford to borrow. Alfredo suggests you come to know and understand exactly how lenders evaluate your creditworthiness and by doing this you will maximize your chances for getting the entire amount you require for the best chance of success in the marketplace. Extol a rare opportunity to make change or make history Investors like to be part of big ideas because they too want to make a difference and help change the world. Canadian investors really like to fund ideas that change our behavior, affect our culture or shape a new way of thinking because these are the ventures that usually grow into $100-million dollar size companies. Show veterans on your business team – highlight experience in your executive summaries Alfredo reasons that most investors he deals with seek the wisdom of older, more experienced entrepreneurs who have “been there, done that.” The days of investing in 19-year old whiz kids past by when the dot-com bubble burst on Friday March 10, 2000. That was the day that the tech heavy NASDAQ Composite index peaked at 5,048.62 which was more than double its value just one year before… but by March 20, 2000 the NASDAQ had lost more than 10 percent of that and continued to plunge especially after finance magazine Barron’s shocked the market with its cover story “Burning Up” which documented how the most celebrated internet start-ups had burned through their VC money, and yes this was due to unusual market circumstances but also in part because whiz kids are not good businessmen.
Put a new emphasis on customers and social media feedback Alfredo likes to see feedback from customers in the pitch deck. Contrary to putting the emphasis on a business team or the revenue numbers, both of which are very important, Alfredo notes that some recent vc funded success stories were driven by consumer demand with documents that placed a new emphasis on the customer. Tell funding agencies about your company from the customer’s perspective. Identify what it is exactly that compels people to buy this product or service? What problems does this product or service solve? Why is it better than the alternatives? Why is it worth the price? Does it compel you to tell others about your experience? Are your customers asking if they can invest in your company? Describe your team with pride Above all the best proposals show passion inside the company and tenacity to stay in business through stormy weather and beyond. Extol rare knowledge in a niche business marketplace. Investors prefer to back teams that really know their market by having backgrounds that are rich and impressive in the market niche for which the company is engaged. Many an entrepreneur fails because they don’t know how to do this type of exercise with a real world view. Goldmount Financial is set to help Canadian businesses attract debt financing and is a good first choice for entrepreneurs to find and secure cost effective business capital for greater success in the marketplace.