How Lakeland Startups and Businesses Looking to Expand Can Find Money
By Adam Spafford
Finding the money to launch or expand your business seems like a daunting task – but fear not. Catapult’s Associate Director Christiaan Abbott tells us how entrepreneurs finance everything from the hometown shop to a global industry disrupter.
“It’s based on the type of business and how much money the business needs,” Christiaan Abbott says of entrepreneurial funding. “The first thing entrepreneurs must do is know precisely how much money they need and what they are going to use it for. If they don’t know those things, likely no one—and certainly no VCs—will give them money. Don’t ballpark and don’t say ‘about this much’–do your research and be as specific as possible.”
VC refers to venture capitalists, private investors in companies.
“If a fledgling business is potentially a multi-million dollar idea that could upend competition on a worldwide-scale, then Angel and VC funding is the best course,” Abbott continues. Angel investors provide capital for a business or businesses, including startups, usually in exchange for convertible debt or equity in the company.
The people who offer this kind of money have to believe not only in your idea but also in you. If that’s the case, it’s possible they will give you the working capital you need to get off the ground—and of course they want to take an equity stake in the company.”
“Conversely, if the idea is a brick-and-mortar location and the entrepreneur chooses the traditional bank-financing route, it’s imperative that his or her personal finances are in order. The bank must know the borrower has relevant background in the industry – in short, does your resume prove you can do this?” Entrepreneurs could consider bank financing after first bootstrapping the business. “Many people use their own savings, 401(k)s, and/or credit cards to build some momentum—and it’s a great way to show the bank you’re taking the venture seriously with your own skin in the game.”
If neither of those options is appealing, there are several other ways to capitalize. Abbott says, “A lot of businesses start with money from friends and family—people who know you, believe in your talent. You often hear advice discouraging this type of financing but many businesses have scraped together seed money with it. Of course, the warnings against this route are well-intended: is it worth putting the relationship at risk, if you, the business, fails and you can’t return the money? Be fully transparent about the risks with the lender.”
“Crowdfunding has gained popularity in recent years—Indigogo, Kickstarter, GoFundMe—and it certainly has some success stories. But just like other financing options, you really have to hustle – do your research so you know you can get traffic to your campaign.”
He also noted that locally the Community Redevelopment Agency (CRA) offers grants to businesses that are creating local jobs, restoring historic buildings and even providing opportunities for certain segments of the population like women-, minority- and veteran-owned businesses.
Perhaps most interesting are the local pitch competitions—think Shark Tank in downtown. “There are many of these all over Central Florida,” says Abbott. “Catapult sponsors two of its own per year, open to any Lakelander, each with $10,000 in grant money to be awarded. Additionally, Catapult is hosting a VC firm’s pitch competition coming up in June.”
If you’re interested in being a participant or a spectator at any of these pitch competitions, check out www.catapultlakeland.com > programs > launch.
Of course Christiaan—who relishes his job of helping entrepreneurs launch businesses in Lakeland by providing guidance, mentorship, networks, and more—sees the remarkable benefits that accrue to Catapult entrepreneurs by being surrounded by like-minded risk-takers who have mustered the courage to chase their dreams and start their own enterprises.
“It’s incredibly important to be around a community like this; being motivated and inspired is a wonderful resource in itself. This community understands the drive and helps fan the flames.”
“Catapult has launched some locally well-known businesses and those are great achievements, but often I’m incredibly rewarded by someone telling me that they were able to quit their day job and provide for their family full-time with their new venture. Sometimes it’s just a quick connection made at Catapult that changed the course of someone’s business – and ultimately their life.”
So go forth—and get funded!