There obviously is more than one source. The textbooks will tell you of the three main sources of fundraising.
Some entrepreneurs can feel intimidated by their bank. Banks can appear on one hand to want to help you, but they don’t support you when you need them most. (I’ve personally fallen foul of that situation!).
It can help to remember…
Their product – is money
They are your supplier
Buying money comes with contractual terms just as any other contractual agreement would – and you should never sign anything you are not comfortable with.
Like any investor or supplier they want to reduce their risk – so communicate often, don’t hide when things don’t go to plan AND ensure you put in place the finance you need long before you need it – the worst time to raise capital is when you are already in the proverbial.
They will always claim to support the needs of growing businesses but the reality today is that they can’t afford to employ the brightest stars, and the majority of people who choose to work for a bank do so because they haven’t the entrepreneurial spirit or courage to set up their own enterprise – so will never understand the pressure of payroll – they just won’t.
Martyn Dawes, the founder of Coffee Nation and author of ‘Wake up and sell the coffee’ who spoke at one of our events last year, happens to be a flying enthusiast. He commented on how sad it was that none of the UK aircraft manufacturers has any debt on their balance sheets – as it means they are not raising capital to invest in growth.
P.S. If you read Lara’s book – More Balls Than Most, you’ll know that she financed the growth of Pacific Direct through a combination of Factoring and Bank Finance, which meant she retained 99% of her equity when she came to exit.
Nicola Cook is an award-winning entrepreneur and twice published international best-selling author on professional selling and personal & business growth. She is CEO of Company Shortcuts, a business devoted to improving business results by injecting skill, passion and strategy to help those entrepreneurs and sales enthusiasts achieve the sales results they desire.