Raising Finance as a new start

ORIGINALLY POSTED BY PHIL HOLT

A question on behalf of a business associate (honest!). What would other Exchange members recommend as the best route to securing second stage funding of £100k for a fast-growing mail order start up? The banks and personal funds provided start up finance, but there's now a requirement to move the business to the next stage of development and one option being considered is Angel finance, another is to go back to the bank - but this will involve further securities. I'd be interested to hear to views of other members who have gone through this dilemma and any words of wisdom they may be able to offer.

ORIGINALLY POSTED BY BILL FLEMING

It's taken me a little while to catch up with the forums, but now I'm here...

Your associate has a 'fast growing mail order business' which implies he/she's a new and growing customer for their suppliers. Give them a try - if appropriate, share your business plan with them and do a bit of a selling job on just how much of their product you'll be able to sell on - once you get the money. Maybe some of them would be interested in a degree of exclusivity with you. I doubt theyd actually give you money, but maybe goods on consignment, or a longer line of credit.

At the risk of teaching grannies to suck eggs I remind your associate to test market campaigns before committing large sums - easy to get carried away with enthusiasm for your own good ideas only to discover nobody else thinks they're all that good.