Turnaround Finance: August 2009

Saturday 29 August 2009

Is Dragons Den for real?

Every business owner, financier, entrepreneur and many others are familiar with the BBC program Dragons Den. The obvious bullying of the well heeled panel is obvious, but have you noticed the acute need of the panel to protect their dignity by getting in the 'I'm Out' before they may be excluded by the needful inventor themselves? Are they really that insecure? Perhaps many of the rich are - they certainly don't want to appear in any way weak. I just wish they would consider their provision of private equity more fairly. How can they attempt to value a company by conventional metrics when in most cases the company is just starting out - an idea that may be genuine and have some promise (although many appear to be otherwise)? Do they think the candidates are stupid? After some maturity, a company may be measured in such ways, but not in the early stages.

Thursday 20 August 2009

My need for private equity funding is kinda urgent - what chance?

My need for private equity funding is kinda urgent - what chance? (I decided to put the title in the actual article just incase you missed it. You can thank me later) So if your asking this question, getting funds for this are getting easier and easier each week, as the economy gets better. My own advice would be to seek for the funds now. You may not have success at first, but like Mama always said, life is like a box of chocolates. You never know whatcha gonna get.

They give me business finance, but what does a business angel want back?

We have been talking alot about business angels here recently, and for our final little segment, we will end on what a business angle wants back. Remember, they are the people who gave you the money to start up you're company in the first place and now it's your turn to give them something back. Many business angels will ask for a partial ownership of your company if it does well, and if not, you simply need to repay them. Maybe even with interest. So always be careful who you barrow money from. You never know how much they are going to ask back in the end.

Can a business angel fly in my direction?

In the past, we have talked about what business angels are. Now, I'm not gonna go over the whole cheesy "They don't have wings" line again, but if you want to hear that speech, just look back a few blog posts. This article is on the topic of how to find a business angel. How do you cross paths with a person who is willing to give you start-up money? Well, it's a great question, and their are two answers. The first one is VERY important and complicated so pay attention. It could take you awhile, but time is money, so here it goes - Make a million friends, then, ask them all for a dollar. ...By the way - can I have a dollar? Number two - Find friends and family and make a speech on how you think your company will work. persuade them.

What is a business angel - do they have wings?

Have you ever heard the term business angel? No, I don't mean a heavenly angel who has wings that God sent. We all know God is too busy solving many other problems and doesn't generally get involved in individual businesses, so we can eliminate that option up front. What I mean is a single person or small group who gives you money to start-up a business in hopes that your idea will actually work and they can make money in the long run from either a return money agreement or partial company ownership. And no, they still don't have wings, so don't get your hopes up.

Is my firm in need of a financial turnaround?

Well? Title asks it all - is my firm in need of a financial turnaround. If you're a guy whose company has seen better days, this is the question you should be asking yourself. Let me tell you a story. In high school, I was the class clown. When teachers asked me a question, I would always make a joke out of it. But I knew when to draw the line, and when to give the teacher a serious answer, and here it is - as you know, the economy hasn't been that good for the last several months, and lots of companies have been struggling. But just now is the economy beginning to bounce back up. It may take a few more months, but if your company can hold on that long, it would be ill moral to go though turnaround finance.

The Turnaround Finance Industry

Turnaround Finance is the industry that exists to aid struggling companies to get back on their financial feet. In the recession of 2009 and 2010, many companies have experienced problems with financial obligations in the context of few new orders, few sales leads, reduced existing demand for their goods or services and more companies demanding better terms and reduced costs. A lethal mix for any company. The turnaround finance company generally resolves the looming disaster by matching industry experts who have ready and willing funds, with the firm that is in need of a business finance injection. The wealthy benefactor then may take a position on the board of the firm and make some much needed recommendations to improve the company position and subsequent profitability. The benefactor will only ever make this investment of business finance if he or she regards the company as having a good business, a fundamentally profitable model. He will insightfully look into the company and from a vantage point of detachment be able to see changes that need to be made. Painful changes perhaps - but changes that will lead to an improved situation.

What is the definition of a individual voluntary arrangement?

Here in the UK, IVA (individual voluntary arrangement) is a formal alternative to avoid bankruptcy. The people who choose this 'last-call' option are usually at there last straw, and can't hang on for anything in the world, but morally and seriously want to find a way to avoid bankruptcy. And as no government wants to see a person go to bankruptcy, the government will help out in this scenario as it's a government put-together alternative in the first place.

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