Bootstrapped: Show me the money

Business, Money

The most stressful part of being a small business owner is cash flow, or lack thereof.

You may remember from my previous blog posts that I am in the process of re-launching my business and main product, the Go With Me Chair, after terminating my licensing agreement with a large company. I’m starting from scratch, and not only do I have to develop a new website and a new marketing plan, but I’m also trying to reconnect with buyers and start working directly with a factory in China to order a batch of my chairs.

What do all of these things have in common? You guessed it: money. Let me think, where did I place that $75,000?

I realized I needed to find investors to help fund my business, but I’ve never worked with investors before and, unfortunately, Googling “investors” doesn’t seem to get me anywhere …

In the past I would have never reached out for legal help with a problem like this, mainly due to lack of funds. I would have ended up trying to do research on my own and make the best decision I could with what I learned. That strategy led to a lot of mistakes and costly fixes, like having to re-name my company and file new trademarks.

RELATED: Preventative legal help saves small businesses money [Infographic]

So, I knew I needed some basic direction on how to finance my business, and this time I knew I had an affordable option. I decided to try Avvo Advisor for the second time.

This time I downloaded the Avvo Advisor app onto my iPhone and completed the simple steps in the app:

  1. Selected “Business” as the topic I wanted to discuss
  2. Entered my contact and payment information
  3. Then waited for an Avvo Advisor attorney to give me a call

Once again, a business lawyer called me within minutes.

I was more prepared for the call this time around so I had a list of questions ready for the lawyer, and gave him a quick overview of my C-Corp company so he could give me the best advice about where to start looking for funding.

The attorney helped me understand the benefits and risks of different funding options, including angel investors, venture capitalists, banks, personal loans and peer-to-peer lending. We also discussed promissory notes, offering equity and having a private placement memorandum. Needless to say, I was a bit overwhelmed with all of the options. But I took good notes, and the conversation gave me valuable information that pointed me down the right path.

With just this 15-minute phone call, I was able to skip the part where I would sit spinning my wheels for days or weeks, being frustrated and wasting time and money on mistakes. I also avoided having to schedule time with my regular business lawyer and pay his $400 / hour fee to get the same advice. I can now save his time and my money for when I really need his help — drafting financing agreements down the line.

By the way, did I mention that I had this Avvo Advisor phone call while sitting in the parking lot of my kids’ dance class?

There’s still a lot of work to do before I find the right business investment partner, but I’m now savvier about my options and won’t easily give away equity in the company or agree to too-high interest rates when I do find a partner.

That’s it for now. The kids finish school next week – the busiest week of the year, for sure. Until next time …

Kristi G.

Download the Avvo Advisor App and, for a limited time only, use promo code Nakedlaw to get a free Advisor session.