investors ready, but i have no capital...

[sdsmudge]

Hi, I am currently a part-time student in the final year of my studies. I have recently pitched an idea to a potential investor who is willing to invest with a business partner. This is great and their expertise is a huge bonus, however for me to maintain an equal share of equity in the business they want me invest fee of 50% their initial investment which amounts to me investing £15,000.

The problem is this, although I have a good credit rating, I also have the debt that comes with student life which currently exists as two student overdrafts both at the maximum limit of £2000. Unfortunately I have no assets to sell or secure any sort of borrowing against, and like most I don’t have a family member or friend who could lend me that sort of money. I am basically clueless as what to do next, who I should speak to, and what options are available to me?

Any advice would be greatly appreciated.

(Just to provide a little information the idea is for a service offered to the public. The investors know the market well and know there is a space in the market for the pitched idea. I am willing to take on risk, as I believe in the idea. Unfortunately the idea is not a product where pre-orders can be made; therefore there is no order book of which I can show the bank manager. It would not be of interest to compromise any more equity in the business.)

[Tom McClelland]

Hmmm, as I understand it they're offering to put in £30k for 50% of the business if you'll find £15k for the other 50% and you'll then do the work.

I think you'll struggle to find capital for a business without you also making a significant capital contribution. Very difficult to find anyone who will invest in you running a business if you have no capital whatsoever, unless you can get your business going first off your own efforts. The problem they have is that your commitment to the business is invisible to them. If others put in £45k and after a few months the game is up then they've lost £45k and you've just lost a few months work (which maybe you were even drawing a salary for, out of the £45k!)

Do you have any family who could help?

[Manukau]

Not sure if this would apply to your situation but have you looked to :
http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES&itemId=1081839421

[sdsmudge]

I completely understand, it seems i am stuck between the rocks, if I can raise such funds I am more than willing to take on that amount of risk. Obviously I do not expect the idea alone to hold onto such equity. As it so happens I work for one of the investors which is how I identified a gap in his market.

I have full confidence in the investors as they have a superb track record. The problem is I do not wish to hand over more than an equal share of equity, therefore along with my idea they want an investment of £15,000 in return for an initial £60,000 investment and consultation from them...

thus meaning for 33.3% each I bring to the table the initial idea and future ideas along with £15,000 and no salary until the project breaks even for their combined equity of 66.6% and £60,000.

So how can I raise such finance without any assets or orders, it seems all I have is a potential investment, the key word being potential?

One suggestion was to speak to my student banks about a graduate loan which I am currently looking into; another suggestion was to find a local business scheme? Can anyone please elaborate?

ps unfortunately i do not have friends or family in such a position who could lend me the funds.

[Williams lester]

So how can I raise such finance without any assets or orders, it seems all I have is a potential investment, the key word being potential?



You could get a job and save up?

[sdsmudge]

You could get a job and save up?

believe it or not im already for one of the investors as stated in a previous post, not really the helpful solution i was looking for but thanks anyway.

[papverpoppies]

Well you could put together a business plan (along with the details of the backers) and take that to a bank to look at.

They can only say no, then again they may be interested.

Are your investors already business people?

How about the Princes Trust (http://www.princes-trust.org.uk/), worth applying.

Business Link (http://www.businesslink.gov.uk/bdotg/action/home?domain=www.businesslink.gov.uk&target=http://www.businesslink.gov.uk/) they have a grant finder page.

Your local Council, they may have something to offer (all Councils have their own criterias) so worth contacting.

Local Chamber Commerce.

Depends what line of business it is - and where - but there are some European grants availble, but they are earmarked more for rural areas.. Look for the RDPE grants for your area..

Poppy

[yorkshirejames]

We work with introducing investment to businesses (startups are something of a speciality, as they are so high risk).

Any investor we would introduce would want to be in charge - in other words putting together two groups of investors is not a good idea.

If you wanted to get in touch with me, we could have a conversation about two things:
-whether one of our investors may be minded to put in closer to 45k than 30k.
-whether you really need 45k, or whether in fact your business plan can manage on 30k?