Startup funding options

[adaminog]

Hi,

My partner is a nurse and wants to get into the care home business as she feels she could develop a distinct competitive advantage.

To buy a business in London big enough to have the most financial potential, the cost is looking at around 1.5 million + It would need to be in London also.

My question is: How would one go about securing the funding to make something like this work? I am guessing banks are going to say no from the off, and all I can think of is venture capitalists which I am not sure about.

Any info is appreciated.

Best,

Adam

 

[BartJr]

Is this question for real?

 

[Cromulent]

If you want funding for a new venture (any venture) even if it is only £1,000 you are after. You need to be able to show the investor that they will get something back from their investment. So you need a rock solid and bloody awesome business plan along with the right people running the businesses and along with CVs showing they are capable of turning the business plan into a reality.

Let me turn this around. If you had £1.5 million and someone asked you to invest it in their business what would you require from them to make you feel confident enough to invest so much money? I imagine you'd want to see them investing their own money in the project, awesome track records of running similar businesses in the past, an extremely well researched business plan with forecasts going at least 5 years into the future and other evidence that you can pull off your business plan.

Venture capitalists aren't stupid. They are going to want to see extremely good evidence before they invest anything let alone £1.5 million.

How much of your own money are you willing to invest? If you are not willing to invest any of your own money in the venture they why would anyone else invest money into it? If you don't even trust yourself why would someone else want to trust you?

 

[IanG]

Tell me all about this competitive advantage that every other VC with a spare few mil hasn't paid medical professionals to already think about.

Also don't go to a bank and tell them you're going to do the job better, that doesn't pay the mortgage.

 

[obscure]

Venture capitalists aren't stupid. They are going to want to see extremely good evidence before they invest anything let alone £1.5 million.

They are also going to want to see an investment of at least 10% of what you are asking for and a business plan that shows the business floating on the stock market or being sold off in 5-8 years (so they can get their investment and profit back).

 

[PaulThompson]

@adaminog - Bank's aren't going to say no as quickly as VCs -
The VC want's an exit in, say, 5 years, what are they going to have to sell? A care home for £1.5m?
The bank might be a better option, you just need;

• A deposit
• Experience
• A business plan.

I'm quite good at finding deposits from what you already have, the business plan is easy enough, do you have the abilities to operate this kind of business?

 

[uksme]

Hi Adam, You don't always need the money up-front. Sometimes the seller will consider an owner financing arrangement, which is when you pay a fraction of the asking price up-front and then pay the remainder out of the profits of the business over a number of years. If your partner has a strong CV, and if you can demonstrate past success in business, this might be an acceptable alternative? The only way to find out is to talk to the sellers of the care homes you are looking at.