The cry for Mom is heard all around the world!
About money, including other people's money
Silicon Valley, New York City, Sydney and the World: Let us work through some of the issues around money. When you start, it is mostly about your money, called MOM, an acronym for My Own Money. It is also called "skin in the game."
But, if you are growing, there is an abundance of stagnant capital. Qualified investors (and people who believe in you) are looking for ways to grow their money either as a loan or as an investment for equity. It will require an excellent business concept, a well-detailed business plan (your story), and real financial projections. They will also require that you understand your financials, even if they are quite modest. Those numbers are the organics of a business, the basic 1-2-3s.
We all need to know as much as we can about capital. Responsible money, with the emphasis on responsible, is an access path to leverage the best of our past and extend it into the future. This kind of money is an equation that is time dependent, time-binding, and time-extending.
You've got to have MOM to get into the game. You can use OPM -- Other People's Money -- to extend your game. All debt capital, or loans, are secured by your own money (assets). That's all MOM. All equity capital is OPM.
If your business has the inherent values to continue to grow beyond your time within it, then you need to be teaching the next generation about the dynamic flow between MOM and the business, between Mom and your banks, and with all other OPM. Ultimately your goal is to be just as liquid as you want to be by the time you are ready to do something else.
Money is always one of the "Big Three" problems within business. When you start, it is consistently #1. When you are growing, money and people constantly jostle for #1. Most every episode of the show since 1994 has looked at how people began their business and what kind of money they used to do it. Business is just a series of problem-solving exercises. That's its nature. If you do not have the stomach for it, get a job. If you think money is going to be given to you just because you have a good idea, keep your job!
There is a real irony here. We call for MOM as a child, and we need MOM (My Own Money) as an adult, and we need Other People's Money or OPM (sounds like opium), to transition out, to leverage our assets and move on to the next thing.
Money within one's business is like the blood pressure in your body. If you do not have capital, you may be among the walking dead. Capital keeps a business pumping; your financials are your physical report. Also, visit the episode of the show about financials and another about exit strategies.
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There are always four paths to walk and eight steps to climb: