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Permalink Reply by Jonathan Pascual on January 25, 2013 at 1:04pm

In reference to investor agreements... If you're doing simple loans from individuals you can use a basic 1-page promissory note that lists all the details and terms. This is very easy to do (you can find many examples online) and serves as something official in writing that both parties can sign and reference. Startup capital fundraising is a daunting task - I know because I'm in the middle of it.

Don't be afraid to ask anyone, but make dang sure you're prepared to answer any and every question they may have. If you don't have a solid business plan with realistic numbers to begin with, you shouldn't even think about asking anyone for money.

Good luck!

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Permalink Reply by Jon Mitchell on January 25, 2013 at 1:10pm

Thanks Jonathan for the response.  So how are you going about raising capital for your shop?  What kind of ownership are offering for an investor?   Are you figuring out the value of your company at the point that it's profitable so the investor will know what they're investment will be worth?   I'm very green at this "raising capital" thing. 

Jonathan Pascual said:

In reference to investor agreements... If you're doing simple loans from individuals you can use a basic 1-page promissory note that lists all the details and terms. This is very easy to do (you can find many examples online) and serves as something official in writing that both parties can sign and reference. Startup capital fundraising is a daunting task - I know because I'm in the middle of it.

Don't be afraid to ask anyone, but make dang sure you're prepared to answer any and every question they may have. If you don't have a solid business plan with realistic numbers to begin with, you shouldn't even think about asking anyone for money.

Good luck!

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Permalink Reply by Jonathan Pascual on January 25, 2013 at 1:22pm

There are a lot of different ways of doing it, but I wanted to retain 100% ownership of the business (and eventual profits). So I'm only soliciting fully amortized loans at negotiable rates and terms.  They vary from 0-5% and are a few hundred dollars to $25k. Again, structure it the way that is right for you and that makes the most financial sense.

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Permalink Reply by Seth Gold on January 25, 2013 at 6:19pm

"Venture Deals: Be smarter than your Lawyer and Venture Capitalist" by Brad Feld and Jason Mendelson is amazing.  

There are some good chapters on debt and it will help simplify some of the terms/deals your may encounter.  It's definitely more focused towards tech startups than coffee shops though. Check it out

http://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalist/dp/11...

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Permalink Reply by Jon Mitchell on May 2, 2013 at 9:59am

Nicholas,  This is awesome!  Thanks so much for sharing.  I'll definitely check all this out. 

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