Been getting a few people ask me the best way to raise finance for their projects. There is no right way to do it and most are a case by case basis. But generally speaking there are about 5 methods to raise cash for your start-up.

Venture Capital – this is probably the most obvious choice, but is it the best? my experience is that you get tied down to via contracts, instead of pushing your business forward. Remember, if you give them control of the company through funding, they can kick you out as CEO, how would that make you feel? However, if they take the project on, it gives you credit and they will bring you into their inner circle – making things happen much faster.

High Net Worth Individuals - Similar to the above, but things might take a somewhat more relaxed approach. Depending on how fast you need to cash to bring the concept to market, this probably isn’t the best method. The guys you are dealing with aren’t VC’s and probably want more information about the concept then most. If you have time however, could be a good option. Lots of these guys typically look for an entrepreneur that they can work with and like, in addition to also being fond of the concept. There is an Angel Investor Network here in Melbourne and also Wholesale Investor that assist with emerging businesses – check them out for some funding.

Friends / Family - I tend to stay away from this unless the deal is a complete lock – as in you have already have a contract for 100m widgets sold and all you need to do is make them. If the deal goes sour then you’ll probably loose your friends and feel awkward around your family. If you do decide this choice, ensure that they receive excellent independent legal and financial advice (from someone not connected to your concept) so if something does go wrong, they were treated like any other investor was.

Credit Cards – Probably the most useful choice to get $50k fast. Make sure you have multiple accounts all on 55 days free interest and 0% on balance transfers for 6 months. this allows you to ‘bunny hop’ the credit around and pay very little in interest. If you take this route, ensure that you have stage two of funding in place so you can pay this debt off as quickly as possible. I’m currently using an Ignite card myself.

Unlisted Public Company / Unit Trust – This can seem easy but isn’t due to the amount of regulation in place. It can be done, with lots of back and forth between ASIC, your lawyers, accountants etc. Can be a costly exercise to begin with, but you are able to bring in more people at lower sums of money which can be good.

Private Company – since you can only have 50 people in a private company within the first year (I think), you can get people to invest that are in your entrepreneurial community. Say you need $100k for stage 1 testing, write a 2 pager for your prospective investors asking for $2k each. This is a great way to fund the concept. However, you must value at $201k and hold 51% of the company so you can’t get kicked out at the very least.

There are heaps of others ways, like banks (who are very risk adverse at the moment), capital raising companies, yourself etc. Make sure your pitch is perfect. Here is a great Run Down by @RossHill on pitching.

Doing any one of these options requires lots of input – so partner up with someone who has already done it or even get involved with a entrepreneurial network where ever you are. Here is a list on them in Melbourne. I’m looking at starting an ‘ultra light start-up’ group here in Melbourne, discussing techniques on raising capital, methods of launching the business, and ways to be more efficient behind the scenes. Let me know if you are keen.

With the three ventures that are currently gaining momentum at the moment, one is waiting on contract signing, the another is pending raising capital and the other is just a matter of bringing a few networks together. So everything is moving very well.

I do not think that there is anything bad about working for someone, truly don’t, however for where I want to go though, I can’t see the value in working for someone other then the pay check (which is still very important). If you can stop working, even go part time and consult or build a mini business and pay for your personal expenses then go out and start.

The argument is quite valid to say that you’re learning so much at your job, this is completely true, but the problem lies here, by the time it comes to executing your strategy for your venture, you’ll be too used to working and getting you pay check each week and you won’t want to move on your deal. 

So instead, if your idea is setting up real estate agency for instance, get the word out there with your business contacts and get introduced to a few directors of agencies, tell them your storey, have a whole heap of questions for them and through your dialogue they will notice your tenacity and want to assist in some way.

That’s what I did with Crisma Media, my indoor advertising business I started at 19, instead of working for an advertising company, I called around and got some face time with a few exec’s of advertising companies to set this up. 5 years down the tack, I’m doing a JV with one of the leading advertising companies building a premium indoor advertising network around Australia.

It’s not proven, but ask any entrepreneur out there; you learn so much more when you’ve taken control of the commercial decision that directly affect your own bank balance and NOT that of your bosses.

For me, it’s a no brainer, you get to have coffee in the middle of day all around the city, meet helps of people that interest you, develop a broader range of business skills, work with the smartest business and entrepreneur minds you can find, and learn how to build and scale a company.

Likewise, when you work with a small enough team, you get to float ideas, discuss and vote on these. It certainly helps with your pitch proposals and confidence down the track. Additionally, doing this all at the same time (not like a grad program where you do one thing every 6 months) will really give you that head start.

So where to from here?

• Get cash flow (even work part time)
• find your niche
• tap into contacts in your business space
• show them your vision and passion
• use them as mentors (even offer 10% equity)
• build some business
• scale idea
• exit – read ‘Idea to Exit’ – http://lucascouper.wordpress.com/2009/03/31/idea-to-exit/

Finally, if you don’t make it because of whatever reason, along the way, many job offers will come through, so you always have that to fall back on and re-start all over again!

Both went through the concepts of starting a business then exiting. Here are some of the notes I made:

• Before one buys a business you really should know when you anticipate your exit will be
• If you can’t, well then you should at least know someday you’ll be getting out of the business. Entrepreneuers don’t buy an income, they build and get out
• With this inmind, you will not be able to sell a business if you have put in place long term contracts with staff and suppliers. i.e Giving your wife a full time job for the rest of her life will not sit well with potential buyers – so be careful when forward planning strategic issues
• Another interesting point they touched on was what a business is worth. Its worth the market is willing to pay. You don’t need to (just yet) go out and pay for advisers to value you business. Explain to potential buyer what the business does and earns – what they are willing to pay is a good starting point
• If you are a small business owner then basically you’re buying yourself an income unless you plan to duplicate and expand. Remember that as an entrepreneur, once the business growth has plateaued, then its time to get out

Some might be obvious, but certainly worth remembering for the entrepreneur that wants to plan, build & execute.

I’ve found it is important to gauge whether the person you want to get financially involved with is all that they make out to be. There have been times I’ve left meetings thinking there will be foreword momentum with certain persons and find that they have pulled the pin and gone sour on the business idea.

Before I invest my time and thoughts, here are a few things to consider:
• Have they done business before?
• If not then don’t let them use your business as a ‘trial’
• Do they have a sound track record
• How many [un]successful businesses have they been involved?
• Doesn’t matter if they’ve failed, but have they been persistent?
• When they tell you they know everyone and talk too much, they’re probably compensating
• Try not to do something with friends, @prenuer twittered – Write all business contracts like you hate each other

These are some simple concepts that should help you get rid of dead weight and make your plan work.

My count is 10.

Below are some that I took quite seriously over the past few years and tried to take to market.

• Last Ride – Distressed Inventory website aimed aimed at cheap ski lift tickets (just like how hotels & airlines work)
• Food Outlet next to Night Club – Didn’t go ahead since landlord had previously been Bankrupt
• Laundry mat with Internet – Very very expensive setup $750k min
• Ticketing System for Apartments amenities – High setup costs, with low returns
• Direct Dry Cleaning & Laundry – Delivery service to high rise apartments & office – Great idea in the states, but Aus isn’t ready for it
• Bars & Cafes – Spent countless hours looking for attractive locations with a good mix between high footfall & low rents (very difficult combination)

The reason I posted these is that i read a blog this afternoon about Digital Mentoring  – basically saying how blogging etc can help you through your start up phase. Shoot through an email to me if you want some info about the above ideas.

1. Talk, chat & speculate to friends about you idea - Get your arse in gear and start it. Now
2. If you think you have stumbled across the ‘best idea in the world’, think again because you haven’t. Someone else has but is too lazy to do anything about it or have already started – you’re just too dumb to realise
3. Don’t be secretive – share the idea because you’re not a marketer, accountant, techy etc, you need help. Exhaust every possible resource you have. That what an entrepreneur does
4. If you find yourself spending more time investigating the idea 3 months after you’ve identified it, rather then speaking and meeting with contacts. Stop. Get a full time job
5. Write up a 20 page business plan before you have even spoke to you mum about the concept.
6. Thinking that the companies website will literally run the business for you and all you need to do is tweak it each month and collect the cash
7. Have already started looking at how much its going to cost you to travel to the US for board meeting with Trump
8. Competitors will be happy that you’ve entered the market place. Re; News reports about the market leaders being happy with competition because it shows there is a market for the product – they aren’t. Would you like someone taking business from you?
9. Not audit your time – everyday you should be writing out a task plan and implementing it. Time yourself and you will be amazed at the time you spend on Twitter, Facebook etc.
10. Don’t leave your job until there is some clear direction and momentum in the business – I left an amazing job @ 21 years old with a major oil company to work with some pissy start up. I did some great things at this start up, but wasn’t able to get the results I had hoped for.

Who am I to tell you? I’m a nobody, but that’s maybe because of the above…

• The Entrepreneur (Full Time)
• Micro Entrepreneur (Working on lots of small projects)
• Weekend Entrepreneur (Making time in between full time work)

What do you consider yourself?

I find it very helpful having a kiosk on the beach. Its a great business model that allows me to tinker with ideas and not go to work. However, I’m asked maybe once or twice a month by associates to come and work for them. I love the idea of full time income, but know that I will fall into that trap of becoming a weekend entrepreneur. Do you agree?

I’ve worked full time and juggled with start up businesses of mine, but find that concept suffers quite markedly. For example, you generally find it tough to get those simple to do tasks or what I call, 1 minute tasks. Moreover, once the concept gains momentum, you really need to be meeting with key individuals and its tough to do so since you’re generally tied up with FT work. I guess that is where PT employment comes in handy with regular income but with sufficient time to tinker..

When is someone considered an “Entrepreneur”? Do they need to have already established a business model? What about if they have had a one hit wonder and nothing more?

Is it like working out? When you keep fit, you stay in shape and people will say “he’s fit”. However, if you were ONCE fit and now overweight, people will not say your fit anymore. So I wonder, how people view the entrepreneur..

For a while now, i’ve been looking a ways to increase the coffee trade at my small shop on the beach. Since its only open during warm / hot summer days, it’s difficult to get a consistent flow of traffic for coffee only. After a few months at the shop I introduced some ideas to get people taking about the shop and therefore push more sales of coffee. It worked. I basically did the top 10 commonly asked questions by the general public. It got people talking and hang around to read the sign.

What quirky concept have you seen and would like to see introduced at a coffee shop?

• Quick quizzes on the table (bit of trivia is always fun)
• Funny / Banned advertising on tables – http://coffeevancouver.ca/2008/06/27/proof-of-concept-taxi-cafe/
• A cafe called ‘Cafe Smiles’ where every staff member is always smiling / upbeat. There is nothing worse then a grumpy barista. This is a concept i’m working on at the moment.
• Customers able to see coffee being roasted in front of them
• A rotating library – where every book in the library is on a specific topic, like The Great Depression or World War 2. Every week / month the topic is changed.

I’m Lucas Couper, in 2007 I graduated from RMIT School of Business (Melbourne). Whilst at uni i dabbled in many projects, two of them are still running till this day.

One of my ventures, Crisma Media, was created when I was 19. It owns and operates Washroom Media across Victoria and soon along the East Coast of Australia.

The other business I operate is The Kiosk. Its a small kiosk / cafe selling comfort food to beachgoers. I love having meetings down there as its probably one of the best offices in Melbourne.

In addition to running these two businesses, I’ve got a solid database of ventures that I’ve worked on over the years. It include lots of information, templates and contacts in various industries.

I’m always keen to touch base with other entrepreneurs and make something happen.