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Key Idea: Find Money To Match Your Dream

People invest in ideas that captivate.

Key Question:

A: 

Most new businesses launch with the owner's money or with backing from friends and family.  If you need to find someone out of your inner circle, you must put together a written plan to win investor attention.

Q:  What is an offering memorandum?

A:  An offering memorandum is a legal document that explains your business idea, how you're going to execute it, your financial projections and your exposure to risk. You are "offering" your idea to investors and must spell out all the details of how you expect to make money so they not only get their investment back but they earn a significant return.

Q:   What did Carrie tell Andy to do with his proposal and why?

A: Andy put a photo of the city of Boston shot from the Charles River on the cover of the offering memorandum. Why? Because there are plenty of tours and tourist attractions in Boston and the most unique aspect of the Duck Tours is that people ride in these odd vehicles that actually drive right into and up the river! He got the idea that people love the view of the city of Boston best from the river because he lived on a boat and would take people on rides. They would consistently say, "Wow, look at that view of the city!"

To start a new business that competes with all of the other Boston tourist attractions, Andy had to convince investors that his tour would be different. Carrie believed that a picture would be worth a thousand words and she was right. When investors saw the photo, they caught a glimpse of Andy's vision and they bought into it.

To convince people to invest in your idea, you must be able to articulate its unique selling proposition. You may have to use pictures to convey the idea.

Andy had no money when he started Boston Duck Tours, and so he went deeply in debt. But he's on the path to wealth. What is that path? How did he find it? His experience working in the finance community taught him that venture capital is available, but you have to know how to attract the right people. Andy did his research, put plans in writing, and prepared an offering memorandum, but money didn't fall from heaven.

It wasn't until he met Carrie McIndoe at Strategic Capital Resources hat he was able to go forward. She was the catalyst. She raised the funds needed - $1.25 million. How do you find your catalyst? You become like Indiana Jones in search of the Holy Grail. You become like Andy Wilson, so focused, so enthusiastic, so persistent that you will find the money or you'll change the business plan until you have one that can be funded by outsiders. Venture capitalists don't want little ideas. They want big ideas. Get a big idea, put it in writing, and find some people who've already done it. Ask them to coach you and be willing to go without for months - maybe even years - before you actually see any cash for yourself.

Think about it

Does your business idea sound good?  Can people visualize it when you talk about it?  Are you clear yourself about why this would be a good business to start? Should you raise money to grow your exisiting business?

Clip from: Boston Duck Tours: The Money is Out There

Boston: Meet Andy Wilson, founder of Boston Duck Tours. A Massachusetts Small Business Person of the Year, he turned three passions into a single business – his love of Boston, his respect for early American history, and the Charles River.

First, he wants us all to know the history of this country's early struggles for religious toleration, freedom, equality, liberty, and the pursuit of happiness. Learn how such passion moved him to quit his job and raise over $1M to launch this dream -- an 80-minute, historically-narrated tour from an authentic World War II amphibious landing craft.

Take the tour now as we wander the narrow streets of Boston and splash down onto the Charles River for the grande tour Boston.

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Boston Duck Tours

Cindy Brown, CEO (Andy Wilson, founder)

3 Copely Place
Suite 310
Boston, MA 02116
6172673825

Visit our web site: http://bostonducktours.com

Office: 6172673825

Business Classification:
Entertainment / education

Year Founded: 1994

Find Money To Match Your Dream

I thought I was gonna be able to pull it off like this. And so I started lining up money and commitments for money, and I said, `Well, it's gonna take another six months.' Six months would come and go, and then by the time that I got all the permits, they said, `Oh, you know, it took this long, something else is gonna happen.'

HATTIE: We're nervous.

ANDY: We're nervous. And so, I was desperate, you know, and I tried to get bank financing, and I tried to go to the SBA, you know, all that stuff--was gone. So in last desperation, I made phone calls. So I finally got a hold of this woman and--through a partner at an accounting firm, because I called him desperately. I said, `You've got to help me find--.' He says, `Her name is Carrie McIndoe.'

(Voiceover) And he says,`Her name's all about what she is, Carrie "Mac Can Do."' I called my mom up, and I said--because I was broke--I said, `I need to borrow some money to buy some people out so I can get to the last step,' and that was in June, and by August, they had raised the money for me, $1 1/4 million.

And, you know, they had the contacts, I had the offering memorandum...

HATTIE: All right. So explain to me an offering memorandum. What is it?

ANDY: An offering memorandum is a legal document that explains your business idea, how you're gonna execute it, your financial projections, the legal structure and it does it in such a way--and it also discloses all the risks. In other words, there are inherent risks in any business, you know. I feel like a farmer. One of the risks was the weather. If it rained for an entire season, I'd go bankrupt, you know.

So I had the logo on the front of my offering memorandum. You know, it's a big, thick book.

HATTIE: The little duck?

ANDY: And when I first showed her this, I showed her a picture of the skyline views from the Charles, and she says, `Andy, you're all wrong. It's not the logo.' And she put the picture of the views right here of Boston on the front of the thing. And I was just telling you about these investors in Maryland. I'd been going around because I'd never met half these people. And I said, `Why did you invest?' And they said, `We liked the idea, and we saw that picture on the front of the offering memorandum, and we were sold.' We said, `We knew it would work.'

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