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Last Update: Saturday September 18, 2021

How does one finance the start up?

Use Money to Borrow Money

1:15 | Go to case study guide, transcript, contact info

Madison, Wisconsin, Monroe Street Historic District: Carol and Dean Schroeder were able to get a loan to buy this building by using their own cash as collateral.

Most companies get started on less than $10,000 and those funds typically come from personal savings or a family loan, not a bank. The fact is there is no such thing as a start up loan from a bank.   Yet that is where Carol got her startup capital.   So one might ask, "How did that work?"

The answer
:  Carol's parents saved money to pay for her college tuition. Because she completed school in three years, they gave her the money she did not spend on a fourth year. Rather than use that cash to make a down payment on the building and purchase inventory, she borrowed money against it. By using the cash as collateral for the bank loan, she had easy and quick access to it in case of an emergency. Yes, she did have to pay interest, but interest on mortgage loans is tax deductible.

Every episode of this show has a startup story (Edelston, Fergus Gegax, Jacobsen, Tobin, etc).   You must be willing to step back before you step forward. You will take a risk and  you will be betting on yourself.  At this point in your life, you should be a known entity, especially to yourself: you know what you want to do. You know what you know and what you don't know. It is not the same as gambling. But, if you're not willing to bet on yourself, you should not start a business. Startup money is hard to find, but not impossible. Don't think banks, think yourself, your family, your suppliers and potential customers.

Think about it

Do you need to learn more about leverage? Do you need to learn more about using other people's money to grow your business? Do you have a banker who has taken time to understand your business? Are their customers or vendors who would loan you money or invest in your future?

Think Big

3:39 | Play Now |   Bill Wiedemann raised $18 million with two rounds of venture capital.

Finance Without A Bank

2:41 | Play Now |  There are no business startup bank loans.  Every founder who wins money from a banker to get going had personal assets to use as collateral.  Or, they might have been lucky to convince a friend or family member to co-sign on a loan.  Laurie Synder, founder of Flap Happy, had to look beyond banks to make her darling hats.

Find Like-Minded People

1:48 | Play Now |   With a clearly defined mission, it is easy to find others who think like you think.

Leave Profits In The Business

3:23 | Play Now |   Most small business owners have to bootstrap their startup and that discipline tends to carry forward so the company can grow with its own cash.

Start Small

2:39 | Play Now |   You can start a business on a wing and a prayer and if you start small enough you can shield yourself  from major disappointment or financial loss.

Work, Work, Work

2:37 | Play Now |   Starting a business from scratch is almost impossible.  You need the right idea at the right time,  the right people and the physical energy of a nuclear power plant.     More...

Attract Money With A Great Idea

4:09 | Play Now |   Fess Parker says that he learned from Walt Disney about the power of ideas.  

Prepare For A Long-Term Ramp Up

3:05 | Play Now |   NoUVIR is the second company launched by the Millers so they knew it would be difficult.

Fund The Dreams Of Others

2:42 | Play Now |   Most people tend to ask, "Why should I fund the dreams of others?"  People like  Remigius Shatas ask,  "Why not?"  For him,  it extends his life-long work.  Meet  Remigius as he shares his wisdom.