A lot of people ask me a whole range of questions and one of the top questions that I get is “Kerwin what types of funding are available for an entrepreneur or business startup like me?”. Let’s see, in detail, the 3 types of funding available for small business.
And I often respond and say, “There are three types of capital that are available to you right now. The first type of capital that we refer to is dumb money.”
It’s really important to know what dumb money is and I know it appears hyper critical and it’s not designed to be, it’s designed to get your attention. Dumb money is essentially existing cash or existing capital that has no intelligence that comes with it. it’s purely a cash instrument which typically comes from places like a bank or what we call the ‘Triple F Fund’ which is the “Friends, Families, and Fools?.
Now, you might be thinking “you call my friends, my family, my fools: dumb?” Well, I might be calling the fools dumb but not your family. Okay, but what I’m saying is that in many cases this capital comes with no intelligence or experience attached to it.
Which leads me to the second type of capital which is called Smart Capital or Smart Money. We’ve got the Dumb Money, that’s the banks and the Triple F Fund and then we’ve got the Smart Money.
Smart money typically comes from someone who’s already been in business before. They are typically someone who’s built a business, sold a business, they have cashed out and now they are a cashed up investor, either a sophisticated investor possibly an angel investor and they are looking to place their money into some other business that they can mentor.
Now it’s really important to point out here at this level these people are not looking to control your business, in fact, they want everything but.
All they want to do is put their money in for it to work and give you the guidance that’s required to use that capital to give you the greatest possible chance of growing and exploding your business. So Smart Capital or Smart Cash or Smart money is very attractive.
And the third type of cash, the third type of capital which is incredibly sexy is what we call the Smart Connected Cash.
Now, as the name actually explains, it does what it says on the box. This access to cash not only has experience and intelligence but it also has high levels of connections that come along with that cash. So these are the people that have experienced, so they can guide you through business and help you, and answer the questions, and provide you with support and mentor, and coaching in some cases, but they also have connections.
Which means, they can open doors for you, give you introductions to new suppliers or to new customers that can essentially leverage what it is that you are doing to help you grow even faster. And again if you’ve got the smart connected capital it’s in their best interest to introduce you to a new supplier who can lower your costs.
It’s in their best interest to introduce you to a new customer or a Joint Venture partner that can potentially add more revenue to your bottom line.
Join the conversation below or tell us if you’re looking for capital or if you have raised capital before and how you did it!
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Kerwin Rae
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I am starting a small business looking for smart money. Where do I look for investors who maybe interested in capital and mentorship for my business?
I would as a start go to as many investor evenings as you can at local incubators they are a honey pot for investors. Also just google angel investment and VC investment then create a solid pitch.
Thanks you for the guidance I need just started reading some of your blogs and they are already making some sense to me. But were do you find these investors. I’ve always done it myself and a partner. spend what I had to continue to grow. But this time trying to start over at zero. And bring together enough scratch to slowly come back from the ashes and prove once again that I have the potential to do great things. Building and remodeling. Is in my blood, I see things before there is even a house plan or even house in front of me. This keeps me being creative, and punctual.
Flipping houses for all these other people for so many yrs. One day maybe I can afford to buy and sell my self is my altimate goal, and funds don’t just fall from the sky. Hard work and dedication keeps me thinking ahead put my passion for my craft is forever. I never had to advertise work of mouth kept me busy yr. Round but resets button doesn’t exist. Ifit did there wouldn’t be creativity. Bland is me. Blunt honest and always ready to jump for even a total stranger. The biggest issue I have is rebuild the fleet but I Have a problem saying no and lose more then I gain.not thinking or care but kicking myself later when you run the numbers.
For to long I always planeplaned the blame game, and was miserable. And that isn’t life it’s a sentence. Then 6monthd ago I guess I did some soul searching and realized I’ve held in so my for so long it was consuming me, amd drestracting Me to the point it effected my crew and there lives , and my family issues was.hell.. I had to just Let all the Bullshit go stop being stressing.
And finally realized something that may have saved my life and it’s a saying ” If you can’t find peace with in yourself your won’t ever find it a nywere else ” and it’s the dam truth..!
Dealing like going for another round I never quite anything,and I’m not to throw in the towel. I look Ault it like this I’m a movement not a monument either step up to the challenge or get run down if your in my way.
Thanks for this.
sometimes we all need is common sense snd some these blogs feel like jumping around
Thank you, I have recently been searching for info approximately this topic for a while and yours is the greatest I have found out till now. However, what in regards to the bottom line? Are you certain in regards to the source?