How many sources of cash are there? Most companies only think in terms of debt and equity. Companies thinking like that may not be getting the cash they want right now: “The banks are not lending what I need”, “I don’t know people with money to invest in my company”. Thinking about debt and equity as inflexible templates causes too many entrepreneurs to give up their creativity and power such that they stop thinking about their options.
As a passionate entrepreneur, you have many choices for cash to grow, even in the current economy, once you realize the secret: there is currency in your passion. To tap the currency in your passion you must take 3 steps: Package, Match, and Price.
Package: Your job as an entrepreneur is to package your passion. Passion is the ability to grow by packaging value that others want to buy. Nike began with a passion to develop performance shoes for professional athletes; then created a market for comfortable shoes for the every-day athlete. Today, Nike sells shoes for walking, tennis, basketball and more. Its passion-driven growth gave Nike its own unique currency. Today, abundant funding sources compete to offer cash –in any way Nike wants it!
What is a successful entrepreneur? Someone who understands how to successfully package their solution for a customer in pain at a value exchange that fits the customer’s budget. What is a successfully funded entrepreneur? Someone who understands how to package their passion for a source of cash at a value exchange that fits that source’s risk appetite.
That’s the power of packaging your passion. When you exchange dollars, someone else has set the price. In contrast, when you use your own unique currency, you set the value of exchange; the price- and the terms. It’s not debt- where the bank sets the terms; it’s not equity-where investors set the terms and may often take control.
Packaging your passion for different buyers gives the entrepreneur a myriad of alternatives for cash on your terms. Modified templates yield access to abundant debt with flexible repayment terms and variable interest payments; also available is unlimited equity which wants you in control because they want to share in a future only you can create.
Match: Packaged passion must be matched to the buyer. How do you do that? Customize. It’s not a “pitch” – it’s a dialogue. A Pitch is generic; your elevator pitch or sales pitch. A dialogue with someone who knows you directly or by reputation yields a customized match between a prospect’s pain and your solution.
Price: Pricing is a reflection of value exchange. Not all capital experiences the same risks so not all capital needs the same return. It’s your job to modify the debt or equity template, customized as a win win for both parties.
Value, like beauty, is in the eye of the beholder. With equity, the highest valuation is not just a good idea, it’s an imperative, confirming you have identified the right investor who sees the same future you do and wants to share in the upside of what only you can create. With debt, the lowest cost is confirmation you have designed the best structure for that lender who sees opportunity where others see risk.
Carly had never reached out beyond the bank to get funding for her 7 year old company until she shared her passion of the future with a college classmate. When Carly customized her passion into a package he could buy, this friend gave her the $150,000 she wanted to accelerate her growth. To protect their friendship, they customized a debt/equity template; repayment in full at Carly’s choice of timing, plus a modest interest premium to market with an understanding the “lender” would be offered the opportunity to invest whenever Carly decided to share stock. Not debt. Not equity. Just Carly’s own unique currency. Realizing she didn’t have to get all the money she wanted from a single source, Carly discovered myriad options for cash- on her terms.
If you are a passionate entrepreneur not yet economically self-sufficient, you are not taking full advantage of your own currency. All it takes is 3 steps: Package, Match, Price. With access to cash to get all the resources you want, the only thing holding you back is you from achieving your full potential is you –and you can change that in a heartbeat.
Stefania Aulicino, president of CapitalLinkUSA ensures business owns get cash to keep control of a bigger, more profitable company, faster, safer than they ever thought possible- in any economy. Let us help you become a magnet for non equity and equity sources to fuel your growth. Please explore our tools, solutions and consulting options tailored for different growth stages and different budgets: www.CashAndControl.com
