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How Rich Can You Get on YouTube?

Turns out, pretty rich actually. But how much money are we talking about?

For starters, according to a study, becoming a professional YouTuber has officially become the most desirable  jobs on the planet.

Which makes sense given some of the biggest YouTubers are generating more money than professional athletes.

The amount of money they are generating is pretty crazy. Here are some of the top content creators on YouTube with the highest earnings.

 

These Top YouTubers Are Making How Much Money?

  1. Ryan’s World — $22 million
  2. Jake Paul – $21.5 million
  3. Dude Perfect – $20 million
  4. Daniel Middleton (DanTDM) – $18.5 million
  5. Jeffree Star – $18 million
  6. Mark Fischbach (Markiplier) – $17.5 million
  7. Evan Fong (VanossGaming) – $17 million
  8. Sean McLoughlin (Jacksepticeye) – $16 million
  9. Felix Kjellberg (PewDiePie) – $15.5 million
  10. Logan Paul – $14.5 million

 

Which begs the question, how many views do you have to get on your YouTube channel to get a fat paycheck?

How Much Can You Make Off Your YouTube Videos?

YouTubers charge brands anywhere from $10 to $50 per 1,000 views, depending on the estimated amount of total views for the pending video. If the video hits 1 million views, then the YouTuber makes anywhere from $10,000 to $50,000.

Crazy right? But there’s a little more to it than that. Here’s the catch…

The Truth About Making Money on YouTube

The vast majority of YouTubers don’t make any money and despite how easy people think it is. Creating a quality YouTube audience and content is a hell of a lot harder than most people think. And it’s only getting harder…

It’s a competitive marketplace. As of 2022, there are more than 51 million YouTube channels out there. The number of channels is growing strong: last year it grew by 36%. People all around the world are creating a YouTube channel, and uploading 500 hours of video every minute.

But obstacles be damned, if you’re up to the task and are interested in cashing in on the billions of people tuning in to watch YouTube videos (and ads), here’s a video that breaks down exactly how to make money using the giant cash printing machine:

WATCH:

For more information visit tylerhayzlett.com

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Accounting Culture Economics Growth Industries Investing News and Politics Personal Development Taxes

40% of All the Money Ever Printed in the US, Was Printed in the Last 12 Months?

The Federal Reserve has been printing money like it’s going out of style in an attempt pay for about $29 trillion in U.S. debt. While it’s nothing new for a government to print money to cover some debt, what is new however, is that the 40% of US dollars in existence were printed in the last 12 months alone.

Which doesn’t seem like it will end well…

 

WATCH:

 

Why is the US Printing So Much Money?

As part of its effort to stimulate the economy, the U.S. government issued stimulus checks to millions of employed Americans. With money they didn’t have…

The government had to borrow by selling its debt in the form of U.S. Treasury bonds and other types of securities.

On a similar but not altogether different note, here’s Charlie Munger and Warren Buffet explaining how, if the government prints too much money, it ends up like Venezuela.

 

WATCH:

 

How Much Money Will the U.S. Print This Year?

For the 2022 fiscal year, a range of 6,876,800,000 to 9,654,400,000 pieces of money will be printed, totaling from $310,572,800,000 to $356,179,200,000.

For more information visit tylerhayzlett.com

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Accounting Best Practices Biography and History Culture Economics Growth Industries Investing Management Mergers & Acquisition News and Politics Personal Development

Video Exposes the Most Powerful Company You’ve Never Heard of. The Blackrock Story

Blackrock is a company that virtually no one had heard of until recently. They have become one of the largest organizations on the planet with $9 trillion in assets under management.

That’s larger than the gross domestic product (GDP) of every single country around the globe, with the exception of China and the United States.

 

WATCH:

 

For perspective, the grand total of wealth funds managed by over 91 funds across the world is projected to be worth approximately 8.2 Trillion US Dollars. A single investment management firm based out of New York manages more funds than all the sovereign wealth funds in the world.

Crazy right? In fact…

If you were to make $1 every second, you’d be worth as much as BlackRock in about 240,000 years.

What’s more, if you research every major publicly traded company in the world and you’ll find that BlackRock is its first, second or third-largest shareholder. They also apparently own part of CNN and FOX.

How Much of the Media Does BlackRock and Vanguard Own?

  • 18% of Fox
  • 16% of CBS (and therefore also ofSixty Minutes)
  • 13% of Comcast (which owns NBC, MSNBC, CNBC, and the Sky media group)
  • 12% of CNN
  • 12% of Disney (which owns ABC andFiveThirtyEight)
  • Between 10-14% of Gannett (which owns more than 250 Gannett daily newspapers plusUSA Today)
  • 10% of the Sinclair local television news (which controls 72% of U.S. households’ local TV)

So yeah they own a  pretty influential piece of the news.

Where Did Blackrock Come From Anyway?

The Company was co-founded in 1988 by a very well-connected billionaire by the name of Larry Fink, who has been described as “a defacto middleman and lynchpin between Washington, DC, and Wall Street.” The firm operates globally with 70 offices in 30 countries and clients in 100 countries.

BlackRock started making headlines during the 2008 financial meltdown.

When the financial crisis of 2007-2008 hit, the US government hired BlackRock to clean up the mess from the crisis by managing the toxic assets that were owned by firms like the Lehman Brothers, Bear Stearns, Freddie Mac. In fact, even amidst the current financial crisis caused due to the Coronavirus outbreak starting in 2020, the Trump administration turned to Blackrock to bail out companies overleveraged in debt. the government is once again looking for BlackRock’s expertise.

Today, at least three of BlackRock’s leaders now hold prominent roles in President Joe Biden’s cabinet.

Given the company’s habit of forming shadow cabinets ahead of presidential transitions and its involvement in the new Federal reserve programs, Bloomberg even went as far as calling BlackRock our “fourth branch of government.

Pretty impressive positioning for a company that’s only 34 years old.

WATCH: BlackRock’s Investment Strategy:

For more information visit tylerhayzlett.com

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Accounting Best Practices Biography and History Culture Economics Growth Industries Investing News and Politics Personal Development Taxes

WATCH: Why the Wall Street Journal Says, “a 2022 Recession Would be Unlike Any Other”

Are we in a recession yet?

Many economists think that’s a possibility and by some measurements, we might already be in one.

But then why aren’t people losing their jobs?

Here’s why Wall Street Journal’s Jon Hilsenrath is calling the current economy as a “jobful downturn.”

 

WATCH:

 

For more information visit tylerhayzlett.com

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Accounting Best Practices Biography and History Culture Economics Entrepreneurship Industries Management Mergers & Acquisition News and Politics Personal Development Technology

Is Netflix Collapsing? The Numbers Are Alarming…

It goes without saying, Netflix has been dominated streaming videos like BlockBuster dominated movie rentals. However new players are catching up and giving the iconic brand a real run for their money.

In a shocking reveal, instead of achieving the target of adding 2 million new subscribers in Q1 2022 that it set for itself three months earlier, they ended up losing 200,000 subscribers…Ouch

This is the first time the company has net loss of subscribers.

This could just be the tip of the ice burg as Netflix is expecting to lose an additional 2 million more subscribers in the ongoing quarter. The market response was brutal. Netflix lost ¼ of its value as the stock price tanked 25% in 1 day.

Competition is cut throat with the emergence of Disney, Hulu, HBO, Paramount, Peacock, Apple and Amazon. This has presented a serious challenge now as people are ditching Netflix for those streaming services that are available at much more competitive prices (Netflix premium is up to $19.99/month which is almost double the competition).

Pricing be damned, the other problem plaguing Netflix is their competitors are reducing the pool size of originalHollywood content they got to pick from over the last decade.

TV and film companies have more options of providers to negotiate with.

 

WATCH:

 

For more information visit tylerhayzlett.com

Categories
Accounting Best Practices Biography and History Economics Entrepreneurship Health and Wellness Industries Investing Mergers & Acquisition Negotiations Skills Taxes

How an Indian Businessman Lost a $42 Billion Fortune

Once the world’s 6th richest billionaire in 2008 with a net worth of $42 billion, Anil Dhirubhai Ambani, lost it all by 2019.

Here’s how…

Anil Ambani was born June 4th, 1959 in Bombay India as the youngest son of the founder of one of the most powerful companies on the planet. His father,  Dhirubhai Ambani, was the founder of a company called Reliance Industries Limited which today is doing $7.366 trillion as a conglomerate, headquartered in Mumbai. It has diverse businesses including energy, petrochemicals, natural gas, retail, telecommunications, mass media, and textiles.

WATCH:

https://www.youtube.com/watch?v=G_H-BoEfwjo

Dhirubhai raised his 2 sons to eventually take over the “family business”. Mukesh and Anil started as executives at Reliance in their twenties. The two couldn’t have been more different. Mukesh was more of a reserved family man while Anil earned a reputation as a flashy playboy who enjoyed rubbing shoulders with Bollywood’s elite.

 

Tragedy strikes the Ambhani family

Dhirubhai Ambani  passed away on July 6th 2002 of a sudden heart attack at the age of 69. At the time of his passing he was the 138th richest man in the world with a net worth of $2.9 billion.

Mukesh, the older brother assumed role of chairman and Anil took the office of Vice President. They were at each other’s throats almost immediately. Each had different ideas for what to do with the company and the two were making decisions without consulting each other.

It was a mess…

It became a real problem. So big that even India’s finance minister tried stepping in to get the bickering duo to make nice. After all, Reliance was one of the biggest economic powerhouses in India.

The sibling rivalry for the control for Reliance was resolved when the 2 decided to split the company down the middle. Mukesh would run the gas and petroleum businesses and Anil would run the communications and power businesses and ultimately leave each other alone.

 

Losing a $42 billion fortune

In 2008, Anil Ambani was at the top of the world as the sixth richest person in the world with a net worth of $42 billion.

But the proverbial sky was about to come crashing down.

That same year Anil Ambani made the decision to invest around $2 billion in advancing Reliance Communications Group, heavily leveraging his company into massive debt.

Then shit hit the fan…

In 2011, Anil’s Managing Director and two Vice Presidents were arrested on suspicion of conspiring to acquire mispriced mobile network licenses for companies Reliance Communications has invested in to illegally bolster the company’s share prices in an attempt to close the debt gap.

The following year In 2012, amidst scandals, Anil Ambani acquired even more debt to pay off the existing debts. Reliance Communications took a loan of over $1.2 billion from three Chinese Banks on Anil Ambani’s personal guarantee.

That’s one hell of a personal guarantee.

By 2016, many of Anil Ambani’s companies ran into debt and operational troubles. On the one hand, Reliance Power had to sell its assets. On the other, Reliance Communications lost 98% valuation in a period of just 3 short years.

RCom was unable to compete against the top reigning telecom companies and lost consumers. This brought down Anil Ambani’s net worth to $2.5 billion.

Still not a bad nest egg by anyone’s standards however, Anil Ambani’s Reliance Communication owed the Swedish network company, Ericsson, $80 million, which he failed to repay. Which shocker, lead to a major lawsuit.

In 2019, the Supreme Court of India ordered Anil Ambani to repay the debt along with interest or go to jail. In an unlikely intervention, Anil Ambani’s older brother Mukesh paid the money owed to Ericsson and yes little brother from going to jail.

Reliance Communications then filed bankruptcy in 2019. But Anil’s problems were still far from over.

He still owed over $700 million including interest to the 3 chinese banks he borrowed money from. In February 2020, Anil declared that his net worth has fallen to zero after considering his liabilities. He pleaded poverty and claimed that he didn’t hold any meaningful assets that could be liquidated to pay off the debts he owed to the Chinese Banks.

Who would have thought that a man who had a net worth of $42 billion in 2008 would claim poverty by 2020?

He still managed to turn out ahead. Today he and his wife Tina Ambani reside in one of the most luxurious homes in India. A 17 story home situated at Pali Hill in Mumbai.

WATCH:

 

For more information visit tylerhayzlett.com

Categories
Accounting Best Practices Biography and History Culture Economics Entrepreneurship Industries Management Mergers & Acquisition News and Politics Personal Development Technology

Is Netflix Collapsing? The Numbers Are Alarming…

It goes without saying, Netflix has been dominated streaming videos like BlockBuster dominated movie rentals. However new players are catching up and giving the iconic brand a real run for their money.

In a shocking reveal, instead of achieving the target of adding 2 million new subscribers in Q1 2022 that it set for itself three months earlier, they ended up losing 200,000 subscribers…Ouch

This is the first time the company has net loss of subscribers.

This could just be the tip of the ice burg as Netflix is expecting to lose an additional 2 million more subscribers in the ongoing quarter. The market response was brutal. Netflix lost ¼ of its value as the stock price tanked 25% in 1 day.

Competition is cut throat with the emergence of Disney, Hulu, HBO, Paramount, Peacock, Apple and Amazon. This has presented a serious challenge now as people are ditching Netflix for those streaming services that are available at much more competitive prices (Netflix premium is up to $19.99/month which is almost double the competition).

Pricing be damned, the other problem plaguing Netflix is their competitors are reducing the pool size of originalHollywood content they got to pick from over the last decade.

TV and film companies have more options of providers to negotiate with.

 

WATCH:

 

For more information visit tylerhayzlett.com

Categories
Accounting Best Practices Biography and History Economics Entrepreneurship Health and Wellness Industries Investing Mergers & Acquisition Negotiations Skills Taxes

How an Indian Businessman Lost a $42 Billion Fortune

Once the world’s 6th richest billionaire in 2008 with a net worth of $42 billion, Anil Dhirubhai Ambani, lost it all by 2019.

Here’s how…

Anil Ambani was born June 4th, 1959 in Bombay India as the youngest son of the founder of one of the most powerful companies on the planet. His father,  Dhirubhai Ambani, was the founder of a company called Reliance Industries Limited which today is doing $7.366 trillion as a conglomerate, headquartered in Mumbai. It has diverse businesses including energy, petrochemicals, natural gas, retail, telecommunications, mass media, and textiles.

WATCH:

https://www.youtube.com/watch?v=G_H-BoEfwjo

Dhirubhai raised his 2 sons to eventually take over the “family business”. Mukesh and Anil started as executives at Reliance in their twenties. The two couldn’t have been more different. Mukesh was more of a reserved family man while Anil earned a reputation as a flashy playboy who enjoyed rubbing shoulders with Bollywood’s elite.

 

Tragedy strikes the Ambhani family

Dhirubhai Ambani  passed away on July 6th 2002 of a sudden heart attack at the age of 69. At the time of his passing he was the 138th richest man in the world with a net worth of $2.9 billion.

Mukesh, the older brother assumed role of chairman and Anil took the office of Vice President. They were at each other’s throats almost immediately. Each had different ideas for what to do with the company and the two were making decisions without consulting each other.

It was a mess…

It became a real problem. So big that even India’s finance minister tried stepping in to get the bickering duo to make nice. After all, Reliance was one of the biggest economic powerhouses in India.

The sibling rivalry for the control for Reliance was resolved when the 2 decided to split the company down the middle. Mukesh would run the gas and petroleum businesses and Anil would run the communications and power businesses and ultimately leave each other alone.

 

Losing a $42 billion fortune

In 2008, Anil Ambani was at the top of the world as the sixth richest person in the world with a net worth of $42 billion.

But the proverbial sky was about to come crashing down.

That same year Anil Ambani made the decision to invest around $2 billion in advancing Reliance Communications Group, heavily leveraging his company into massive debt.

Then shit hit the fan…

In 2011, Anil’s Managing Director and two Vice Presidents were arrested on suspicion of conspiring to acquire mispriced mobile network licenses for companies Reliance Communications has invested in to illegally bolster the company’s share prices in an attempt to close the debt gap.

The following year In 2012, amidst scandals, Anil Ambani acquired even more debt to pay off the existing debts. Reliance Communications took a loan of over $1.2 billion from three Chinese Banks on Anil Ambani’s personal guarantee.

That’s one hell of a personal guarantee.

By 2016, many of Anil Ambani’s companies ran into debt and operational troubles. On the one hand, Reliance Power had to sell its assets. On the other, Reliance Communications lost 98% valuation in a period of just 3 short years.

RCom was unable to compete against the top reigning telecom companies and lost consumers. This brought down Anil Ambani’s net worth to $2.5 billion.

Still not a bad nest egg by anyone’s standards however, Anil Ambani’s Reliance Communication owed the Swedish network company, Ericsson, $80 million, which he failed to repay. Which shocker, lead to a major lawsuit.

In 2019, the Supreme Court of India ordered Anil Ambani to repay the debt along with interest or go to jail. In an unlikely intervention, Anil Ambani’s older brother Mukesh paid the money owed to Ericsson and yes little brother from going to jail.

Reliance Communications then filed bankruptcy in 2019. But Anil’s problems were still far from over.

He still owed over $700 million including interest to the 3 chinese banks he borrowed money from. In February 2020, Anil declared that his net worth has fallen to zero after considering his liabilities. He pleaded poverty and claimed that he didn’t hold any meaningful assets that could be liquidated to pay off the debts he owed to the Chinese Banks.

Who would have thought that a man who had a net worth of $42 billion in 2008 would claim poverty by 2020?

He still managed to turn out ahead. Today he and his wife Tina Ambani reside in one of the most luxurious homes in India. A 17 story home situated at Pali Hill in Mumbai.

WATCH:

Categories
Accounting Best Practices Biography and History Growth Investing Personal Development

The Number 1 Rule of Money – Patrick Bet-David

In an interview with host Lewis Howes on the show School of Greatness (which has been watched by over 1.3 million people), Patrick Bet-David explains the #1 rule of making money. And with a personal net worth estimated to be north of $200 million, he should know a few things about the topic…

In the interview Bet-David explains that the first rule of understanding the management of money is that it’s just a game.

“the only thing to know about money is that it’s a game. It’s that simple. Just like any game, you can get better.”

“Money’s Just a Doubles Game”…

According to Pat, the entire game of money is about doubling your money.

For example, if you have $1,000 cash in your bank account, you are 10 doubles away from having a million dollars. You’re five doubles away from $32,000, 13 doubles away from having $8.192 million, and 14 doubles away from $16 million dollars. How soon can you double your money?

That’s it. It’s a doubles game. Can you take that $1,000 and double it to $2,000 in the next year?

Now that it’s $2,000, you’re nine steps away from a million dollars. If you already have $100,000 in your account, then you’re three to four doubles away from a million dollars. Building wealth is a piece of cake when you understand the doubles game.

WATCH:

About Patrick Bet David:

Patrick’s amazing story starts with his family immigrating to America when he was 10-years old. His parents fled Iran as refugees during the Iranian revolution and were eventually granted U.S. citizenship. After high school Patrick joined the U.S. military and served in the 101st Airborne before starting a business career in the financial services industry. After a tenure with a couple of traditional companies, he was inspired to launch PHP Agency Inc., an insurance sales, marketing and distribution company.

He did all of this before turning 30…

About Valuetainment:

Patrick also created Valuetainment, a media brand with the purpose of teaching fundamentals of entrepreneurship and personal development while inspiring people to break from limiting beliefs or other constraints.

It has been referred to as “the best channel for entrepreneurs” online and has evolved into an emerging media network providing news, other content partners and a weekly podcast.

Additionally, Patrick speaks on a range of business, leadership and entrepreneurial topics including how and why to become an entrepreneur and the importance of learning how to fully process issues.

For more information visit tylerhayzlett.com

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Accounting Economics Growth Investing Personal Development

Show Me The Money – Part Deux

By Danna Olivo
Show Me The Money – Part Deux
June 9, 2022

Funding is a crucial part of any business’ success. Unless your balance sheet shows a massive cash hoard like Apple’s, at some point, you must answer funding questions if you’re planning to expand your business or just to make it financially stable.

When do you need additional financing?

Business growth happens in five consecutive stages. Let’s compare it to birthing and raising a child. During any or all stages an entrepreneur may be looking for funding to manage the growth process.

  • Napkin Stage – This is conception. The business is a spark in the eye of the entrepreneur. They have a vision or dream of what their business will be like.
  • Proof Stage – This is the stage where the business passes the sniff test or NOT in the market (Is there a need? Is the price enough? Who are your competitors?) Is it worth the time and investment needed to pursue this opportunity?
  • Build Stage – This is where the business model is developed, and the processes and methodologies are identified and proven. Think of this as the stage when a child grows and develops through the developmental years as he/she matures.
  • Funding Stage – This is the stage when the child is ready to graduate and go out on its own and spread its wings. The business is ready to move into the next phase of growth (exponential scaling.) To do that requires equity funding, planning, and resource management…meaning MONEY!
  • Growth Stage – this is the stage when the business grows exponentially. Profit margins increase as revenue dollars increase. The business may be able to run autonomously allowing entrepreneurs to relax and enjoy the fruits of their labor.

There are several reasons why a business needs to have a fresh influx of capital, and here are some of them:

Additional working capital

Having enough working capital is important when looking at a company’s financial health. Lack thereof may have a serious impact on the future of your business. Many businesses choose to apply for external funding to create enough working capital to enable them to fulfill their growth ambitions.

A loan can cover short-term funding requirements while giving the business the money it needs to grow or bridge the gap between customer orders and supplier payments to help the company meet its funding obligations.

Working capital also means that you will have additional funds to venture into new, potentially revenue-generating opportunities.

Asset purchase

Unless you’re content with your current revenues and output, it’s part and parcel of any company to have expansion plans. And part of any expansion plan is the purchase of assets.

Starting a business

If you’re in a business for too long, let’s say manufacturing, you’ll probably realize that some parts of your normal processes are better left with those you can control. So, it is quite normal for any business to control and build other businesses around their main ones.

Going back to the example, if you’re in manufacturing, you might consider building other businesses that aid in helping you with your raw materials or logistics.

Why is funding a bit of a challenge for startups?

Availability of funding sources may not be a problem with old, established companies, but it is quite a challenge for startups. According to a study, more than 75% of startups aged less than two years old, and more than 70% of businesses aged 2-5 years old have reported difficulty in getting funded.

More than half of startups have sought funding at some point, but only a little over a quarter of those who applied got approved. Out of those approved, a whopping 41% didn’t get the amount of funding they hoped for.

There are several factors why startups experience a certain degree of hardship when securing much-needed financing. Aside from age (which may be correlated with stability), some startups also fail to show how their business is scalable. Consequently, since they don’t have an idea (yet) how to expand their business, they also do not have an idea of how much additional funds they need. The worst kind is that they don’t know what to spend on.

Lenders are also looking out for returns, so if they think that your company might not be able to deliver, then it would be natural to get declined.

Types of financing available

The good news is that this article will set out the common ways you can consider getting some additional funding:

Self-funding

The best (and the cheapest) option for funding your business is using your savings. This will give you peace of mind knowing that despite having “skin” in the game, you won’t be saddled with loans to pay in the event the business goes under.

Some entrepreneurs who have resorted to self-fund their businesses say that they’re more driven knowing that “it’s all or nothing”. Since they’re staking their wealth on the line, they don’t have a choice but to work hard and smart to get back capital.

Debt-funding

Banks

If you’re one of the few business owners who have a stellar credit score from the start, then one practical option for you is to get some bank-funded loans. A traditional business term loan is the easiest type of debt financing to understand because it’s probably what you naturally think of when you think of a business loan.

You borrow a fixed amount of money, usually for a specifically stated business purpose. Then, you pay back the loan over a fixed term and typically at a fixed interest rate.

Small Business Administration (SBA)

There are three types of loans that the SBA offers:

7(a) program: The most common SBA loan program, the 7(a) loan program, offers loans up to $5 million to be used for a wide variety of purposes. Use our guide to learn more about the SBA 7(a) loan program.

Microloan program: The SBA microloan program provides financing opportunities for entrepreneurs needing between $500 and $50,000 in funding. Designed for newer businesses, the SBA microloan program is one of the best forms of debt financing for startups. Learn more about the SBA microloan program.

CDC/504 program: The SBA’s CDC/504 loan program is designed for businesses looking to make a major fixed asset purchase—such as large equipment, land improvements, or the purchase or renovation of an existing building. Borrowers through this program can take out up to $5 million, with repayment terms of up to 20 years and interest rates based on current treasury rates. Use our guide to learn more about the SBA 504 loan program.

Equity funding

Angel Funding: Compared to Venture capitalists, angel investors may offer more flexible investment terms compared to venture capital firms. Angel Investors are known for putting up a significant amount of money in exchange for equity in the startup.

Angel investment may be too much for a small shop owner, but small plant owners, tech startups, or firms can take advantage of this source.

Since you’re giving up a portion of your company’s ownership, this may not be the best option if you’re conscious of that. Especially since they will also become part owners, they will certainly have a say in how the business is run. They’ll be highly interested in your exit strategy, as they will make most of their money when your business is sold. So, we suggest you carefully screen who you let in your company.

Venture Capital: Venture capitalists are similar to angel investors. However, since they operate as a group, they tend to infuse a larger amount of capital than angel investors (think of $2 million and up). Being professional investors, they can guide you in growing your business. They’ll also probably be interested in having a say in how your business operates.

Keep in mind that venture capital firms will invest at a point when injecting more capital into your business will result in further growth and more profit.

Crowdfunding: If you don’t like opening a large chunk of your business exclusively to one angel investor or a venture capital firm, you can investigate crowdfunding instead. In crowdfunding, a community of small investors puts up funds and invests them in your business. Since their shares are too small to have a say in how things are run in your company, having them individually won’t be as challenging operation-wise.

However, since you will be in debt to a LOT MORE people, you will have to be a bit more transparent with your campaigns and make them measurable and understandable. Having a well-established network of friends and professional contacts can increase the chances of a successful campaign.

Factoring (receivable financing): Factoring is a financial transaction and a type of debtor finance in which a business sells its accounts receivable to a third party at a discount. Sometimes, a business will factor its receivable assets to meet its present and immediate cash needs.

For example, you’re working on the construction. You have accounts receivable from your client worth $100,000. But to work on that project, you need additional capital that you don’t have now. This is where factor funding comes in. You sell your receivable for a discount, and in turn, you get the funds you need to start on the project.

Mezzanine capital: Mezzanine capital is like combining the best out of equity and debt financing. What happens is that banks usually do not lend money to businesses that just started, right? They just do not have enough information for the bank to make an informed decision. With Mezzanine capital, you can get financing from banks despite not having the requisite “business maturity,” but this is the tricky part—you must relinquish a bit of your equity.

It’s a fair exchange if you ask our opinion. The downside of this arrangement is that the interest rates might be a bit high to make up for the risk that the banks are taking. However, we maintain that this funding option is still one of the best out there.

Bottomline

There are a lot of practical funding options for any business owner. It’s up to you to determine which one suits your needs best. MarketAtomy has a FREE eBook entitled the “Business Funding Resource Guide,” highlighting the 7 Steps to understanding the SCIENCE of Business Funding. Head over to Marketatomy.com for our latest business blogs and articles.

Next blog we will be discussing when to know you are ready for funding. Stay tuned.

Danna Olivo is a Growth Strategist, Author, and Public Speaker. As CEO of MarketAtomy LLC, her passion is working with first-stage business owners to ensure that they are prepared and equipped to launch and grow a successful small business. She understands the intricacies involved early on in business formation and as such the challenges that come with it. A graduate of the University of Central Florida’s College of Business, Danna brings more than 40 years of experience strategically working with small and medium businesses, helping them reach their growth goals. danna.olivo@marketatomy.com

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