My Library and Courses
Last Update: Tuesday December 12, 2017

Money at Step 7

What are you doing with the money?


  Four Steps to start and run All of us
Step 1. Initial Idea $
Step 2. Start-up $$
Step 3. Incubate $$$
Step 4. Sole proprietor $$$
  Four to run and grow a business orngeldy.gif
Step 5. Employer $$
Step 6. Growth $$$
Step 7. Sustainability $$$$
Step 8. Exit at the top $$$$

Key Questions

1. Focus on order and continuity. 

You have choices. The first principle of business is always to create order and then let the orders follow.

Keep focusing on the fundamentals of your business.  It is  as important as now as it was in the beginning. What do you know about knowledge management?  How would you value your business?  ...the intangibles?

2. Focus on relations and their symmetries.

Are you fair with your family?  ...your employees?  ...your suppliers?  ...your customers?  Are they fair with you?

3. Focus on the dynamic of your business and ways to create more harmony.  

Do you know your options?  Which equity-liquidity model is best for both you and your business?

4. The Big One:  What's next?  Can you more-fully integrate it all?

What is the highest and best use of your time? 

Your present is best understood by your key critical ratios at the day-end closing. Your future is best understood by looking at the equity-liquidity model and your exit strategy.Does your exit strategy include a path to the end of your life?  What do you have in place?


Case Studies

Learning through other peoples stories - Metaphors and analogies

To learn something new, we must compare it to things that we know.  But, to really know something, we ask questions.  We look at examples and we explore all the dimensions and relations around that new concept, insight, or information.  As much as possible, we explore how this new information fits in with our history of relations.


Is your business all about money?

One might think so given the media's fascination with the greedy within business.  But money is a representation of value and where there is little value, ultimately the business will not thrive.

Liquidity and equity:  ESOP, DPO, SCOR, Private Placement, IPO.     Overview

Many of the owners who have appeared on Small Business School (and also on the two prior productions, Small Business 2000, and Small Business Today) have done some kind of  offering of the equity in their business to people outside of their family.

First, if you have not done so, review the episode about money.

ESOPs and the 401K Plans:

Study the Employee Stock Ownership Program.  It is formal and structured means to become liquid, vest employees, and create a succession plan. We studied it in depth (as much as practical on television) in a show simply titled, "Employee Ownership." To go to our working reference page for ESOP information, click here. Several of the modified employee-ownership programs discussed in these episodes are really robust 401K plans.

Direct Public Offering, also known as the DPO

A Direct Public Offering is regulated by the state securities commissioners and falls under the jurisdiction of the SEC through the Securities Act of 1933. That Act, often called "Reg D" or Regulation D, comes in three forms, Rule 504, 505, and 506. Each uniquely restricts the number of investors and/or the "qualifications" of the investors. Here are a few stories about direct public offerings:

1. Boston Duck Tours: Learn about Andy Wilson's use of the offering memorandum. It is much like a SCOR.

2. The French Laundry: 48 highly-qualified investors who love to be able to say, "Sure, I own a piece of The French Laundry; let's go for diner!"  This is a DPO that we all wish we had a piece of the action.

3. Jagged Edge Mountain Gear: Red flags went down on this field. The business went through some heavy transitions and finally had to be broken up.  This is a DPO that did not work.

Small Corporate Offering Registration also known as the SCOR.

Study this episode of the show.  You will become familiar with Rule 504 of Regulation D of the Securities and Exchange Act of 1993. Since 1982 small businesses can sell equity in their business to outside investors without going through the expense of an IPO. It is called a Small Corporate Offering Registration (SCOR).

If you are heading in this direction, you would be well-served to to review the stories in this special show about the SCOR instrument with the founders of the Texas Capital Access Forum and Deborah Bortner, Securities Director for the State of Washington:

1. U-7 - This document looks a little like a typical prospectus or offering memorandum for investors. It is, but it has been simplified by Deborah Bortner (above) and a team of State Securities Commissioners!

2. North American Securities Administrators Association (NASAA): Get to know your state's securities commissioner (who is a member). Or, click on Resources (always on the left side bar), then click on your state. You should find your securities administrator in the list at the top.

3. Securities Exchange Commission (SEC): Advisories for small business owners. Have a great story to tell? Does it teach us something more about one of these ways of raising money? Let us know and we will publish it here.

Private Placements:

Review these videos within episodes that in part focused on Angel Capital and Venture Capital.

In September 2004 we began following a group  (people from NASDAQ, Bloomberg, Reuters and Thomson Financial) that proposed taking private businesses through a validation process just as if they were going to go public. This development, even though they have been working on it for years, is still in its early stages.  Here is a video about that process.

Initial Public Offering also known as the IPO

An Initial Public Offering, then opens the way to many additional rounds of public funding. If you are up for the long march, and you are going to do it, you would be well-served to review the study guides of these stories: , , and They have all been successful. There are many more stories -- case studies -- coming.

1. XTO aka Cross Timbers Oil: You will not believe it. These fellows really understand money.

2. Medallion Funding (SBIC - Small Business Investment Company) Another incredible story.

3.  Biosite.  At the beginning stages of Biosite, the need for rapid testing was laughed at by the big boys in the diagnostic industry. This fact would have made getting a bank loan impossible.

4. UroCor (a biotechnology research firm): A classic case study.

There are no two business owners who are alike.

No one formula works for every one and ultimately the decision rests on the abilities and leadership of you, the founder/owner and chief executive officer. Your board of advisers can help, but the decision is yours.

Please review the show that about Staying Power, especially the case study guide. More capabilities are slowly being added to this site (see the Future),  so you can schedule collaboration  events to meet investors and drop off into individual chat sessions.

Help out! What resources have you found to be useful? What resources and interests do you have? Send us a note.