National Diversified Funding Corporation (NDFC) recently invested in a company founded by a member of our program. The entrepreneur believed he needed more than a $1 MM investment. NDFC’s finance team introduced the company to near a dozen angel and private equity investors where the entrepreneur made a compelling presentation for the future of his company and the return to investors.
The two who bit, wanted control of the company.
Somewhat frustrated, I did a cash flow analysis and concluded that with some restructuring of the terms under which he sold his product and some other cash flow management strategies, that $150,000 of capital was all that was required. An agreement was reached where National Diversified Funding Corporation made a direct investment for a 20% stake in the company leaving the entrepreneur in control.
It is not uncommon for entrepreneurs to overestimate the amount of capital required to fund their enterprise. More often than not, good cash management strategies, like those taught as part of the Bizar Financing program, can reduce the cash needed by a factor of eight to ten times. This can mean the difference between giving up control and not. It also means your business will be more profitable because it is more efficiently managed.