| Widget sales are booming - the competition is | | | | investors* Other professional service |
| scrambling, demand is up, and the books are | | | | providers within your core management teamIf |
| finally treading water. Your core management | | | | you developed a list of potential investment |
| team has big ideas for the future of Widget | | | | partners prior to start-up, renew your |
| Inc. Opportunity is abundant; but how will | | | | contact with these individuals. By telephone |
| you fund that next big leap?As your start-up | | | | or letter, convey the success your product or |
| matures, obtaining second- or even | | | | service has experienced, as well as your |
| third-round funding may allow your business | | | | purpose for the post start-up funding. With |
| to expand and grow into new opportunities | | | | a solid track record in hand, you may be |
| identified after your business was | | | | surprised to find how many potential |
| established. If your product or service has | | | | second-round investment partners you have.In |
| proven itself in the marketplace, you may be | | | | addition, you'll be in a stronger position |
| a candidate for an additional round of | | | | during the negotiation process, meaning you |
| funding.Some possible uses of post start-up | | | | won't have to give up as much control to |
| funding include:* Penetration of new | | | | achieve your desired result.Tips For |
| markets, either by industry or geographic | | | | Maximizing Post Start-Up Funding* Don't |
| location* Development of new products or | | | | commingle funds. Avoid falling into the trap |
| services that compliment your key lines of | | | | of using new funds to level the books. If |
| business* Acquisition of competitors, staff | | | | you obtained additional funding for |
| and/or facility expansion, or new | | | | expansion, do not deviate from the plan. |
| equipmentDamage ControlIf your company is | | | | Address any cash flow problems or existing |
| struggling to make ends meet, post start-up | | | | debt service independently from your |
| financing is not an effective way to address | | | | company's expansion needs.* Learn from past |
| red ink.Consider other methods of debt | | | | mistakes. Undoubtedly, your company's |
| management such as refinancing, streamlining | | | | start-up phase was a learning experience |
| systems of production, and bootstrapping | | | | unlike any other. Recall the lessons learned |
| before looking for additional funding. | | | | from handling your initial start-up capital. |
| Investors will not be interested in extending | | | | Now that you've established a strong working |
| additional funds to companies that have not | | | | relationship, call in your management team to |
| yet established themselves firmly in the | | | | gather additional opinions on the best way to |
| marketplace.Identifying Post Start-Up Funding | | | | disburse funds on each project.* Look for |
| SourcesThe best source for post start-up | | | | new opportunities along the way. As you |
| funding may be your original investment | | | | implement your expansion plan, be on the |
| partner. However, sometimes asking your | | | | lookout for ways to streamline and maximize |
| investor-partner for additional funds can be | | | | the results of your efforts. Don't be afraid |
| a lot like asking your parents for a raise in | | | | to upgrade your plan; remember that your |
| your allowance. You're going to have to | | | | business plan should be a "living" document, |
| really prove a need for it, and even then, | | | | able to flex as the status of your market and |
| your original funding source may have woke up | | | | the general economy change.Jim D. Ray is a |
| on the wrong side of the financial | | | | seasoned entrepreneur and president of Web |
| plan.Should this prove to be the case, there | | | | Presence, a national web design firm |
| are additional sources to consider, | | | | exclusively serving the small business market |
| including:* Lending institutions (banks)* | | | | sector. |
| Venture capital firms* New private | | | | |