For the entrepreneur, everything starts with a business plan that lays out what they will be doing. Once the plan is in place, now you have to finance your new start-up, or ongoing business that has a new “use of proceeds” for a new line of business. This is where most entrepreneurs fail – finding money and putting it to work is an art form. Find the wrong money, and it kills you (like factoring when your clients take too long to pay). Find the right money at the wrong time, and you never get to use it again (commercial lines of credit when your bank uses cash flow and you are building assets).
Therefore, entrepreneurs need to be adept at securing equity, but there are so many laws surrounding this area that most entrepreneurs as well as seasoned professionals run afoul of the laws, both federal and state securities laws. For instance, as a merchant banking organization, Rhodes Holdings LLC does not raise money – we restructure organizations, working with them to re-write their business plans with strategies that allow them to secure financing. I, Robert Rhodes, accepted the position of Managing Member of American Equity Fund LLC (“AEF”), so that public companies that were reorganized could be offered a financing facility that was legal, and did not run afoul of these laws – specifically because AEF works with clients to file registration statements with the US Securities and Exchange Commission (S.E.C.) for the equity investment. We would like to help entrepreneurs understand the process though; here are few articles that you should read:
- “When Raising Investment Capital, Can You Pay Someone to Do it for You?“
- “Using others to raise capital“
© 2012 by Rhodes Holdings LLC, all rights reserved.
- Ways to Finance a New Business (techpluto.com)
- Small business tips series: Is it worth writing a business plan? (hiscoxusa.com)
- 5 Biggest Money Mistakes of Rookie Entrepreneurs (inc.com)