Personal Development for Smart People^TM Forums

Rabbit · 04-22-2009, 04:54 AM

Hey all,

I am just starting to plan out my start-up (beer brewpub) and have a quick question for you all:

I need seed capital. I haven't decided exactly how much I should try for or whether I can fund this via private loans. This money will be used like normal seed capital: for the formal filing and creation of the company, writing the business plan, consulting services, obtaining permits, etc., before the more formal investment stages.

I'm beginning to plan now, and in August I will graduate with my bachelor's - and more importantly, my student loans (aka living expenses) will run out.

Is it possible/legal/ethical (at least in Texas) to, explicitly disclosed to investors, requisition some of the seed capital for a personal monthly subsistence income (I'm talking an itemized list of the bare essentials- food, rent, utilities, student loan payments, etc bills)? And of course, while disclosing everything properly according to accounting laws, etc.

If not, what options do I have to support myself while I plan and engage in start-up? Another part-time job seems impossible, and private loans are unlikely as I have no collateral, no employment/income, about $15k in student debt already, and likely will not have a cosigner...

Rebecca800 · 04-22-2009, 06:02 AM

I'm not 100% sure but I think you can allocate yourself a salary from the seed capital, as long as its declared in your investor meetings. Presumably you will need to breakdown where the money will go anyway, and its reasonable to attribute some of that money to staff costs.

Curtis2011 · 04-22-2009, 08:10 PM

Rabbit,

I was going to write a long post discouraging you from starting your own business, but then I realized that I hate it when people tell me I can't achieve everything I dream of.

So... Good Luck!

(and I don't know the answer to your question)

Rabbit · 04-22-2009, 09:34 PM

Discouragement because I am not yet financially stable?

I'm all for constructive criticism, so feel free to share your opinions

. One way or another, this is my dream, and I will make it reality. A few naysayers won't change that (and I've already encountered a few).

RT Wolf · 04-22-2009, 09:41 PM

Good, ignore the naysayers. Even if you fail, you'll succeed. If anyone pulls out that old "80% of new businesses fail in the first year" tell 'em that a comparable amount of businesses suceed in the first year that are started by experienced businessmen. How do you get that experience? by failing a lot.

You might find Dan Kennedy's books helpful. Good for marketing stuff.

I don't have an answer to your question but I can offer "teach a man to fish" advice: start talking to more entrepreneurs. Talk to other brewers, make friends with bar owners, even start talkin to bartenders. Talking to a bunch of entrepreneurs (preferrably successful ones), you can find a great source of advice, inspiration and answers to your questions. Just meet a whole bunch of people. Not everyone will be worth talking to again, but some people are a perfect match for you. Talk to everyone and tell them what you're doing. You never know what someone might come up with after talking to them. I landed a job after talking to a guy I met on my sister's field trip. Meet people, many people.

However, I don't see why you couldn't pay yourself a living wage. You could talk to whoever you think is going to be funding you and just ask them this question. Call 'em up. Call a bunch of different sources and just try to talk to someone who can answer your questions. I'm sure different sources have different requirements.

Dot · 04-22-2009, 10:06 PM

Business, especially your business, can be anything you want it to be.

If you want to include a salary for yourself to live on in the seed and/or start-up stages, then include it in the numbers. And sell it to the investors.

BTW, I would highly recommend you not seek to take out any loans. Look for angel investors. And you'll need to have a fairly flushed out business plan even to enter the "seed" stage.

If not, what options do I have to support myself while I plan and engage in start-up? Another part-time job seems impossible.

Ah... how about a job in a beer/brewpub? : ) How much experience do you have in the type of business you want to enter?

04-22-2009, 04:54 AM	#1 (permalink)
Rabbit Banned Join Date: Jul 2008 Posts: 84	Start-up and seed capital - quick question Hey all, I am just starting to plan out my start-up (beer brewpub) and have a quick question for you all: I need seed capital. I haven't decided exactly how much I should try for or whether I can fund this via private loans. This money will be used like normal seed capital: for the formal filing and creation of the company, writing the business plan, consulting services, obtaining permits, etc., before the more formal investment stages. I'm beginning to plan now, and in August I will graduate with my bachelor's - and more importantly, my student loans (aka living expenses) will run out. Is it possible/legal/ethical (at least in Texas) to, explicitly disclosed to investors, requisition some of the seed capital for a personal monthly subsistence income (I'm talking an itemized list of the bare essentials- food, rent, utilities, student loan payments, etc bills)? And of course, while disclosing everything properly according to accounting laws, etc. If not, what options do I have to support myself while I plan and engage in start-up? Another part-time job seems impossible, and private loans are unlikely as I have no collateral, no employment/income, about $15k in student debt already, and likely will not have a cosigner... Last edited by Rabbit; 04-22-2009 at 05:13 AM.

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04-22-2009, 06:02 AM	#2 (permalink)
Rebecca800 Senior Member Join Date: Jun 2008 Location: Auckland, New Zealand Posts: 636	I'm not 100% sure but I think you can allocate yourself a salary from the seed capital, as long as its declared in your investor meetings. Presumably you will need to breakdown where the money will go anyway, and its reasonable to attribute some of that money to staff costs.

04-22-2009, 08:10 PM	#3 (permalink)
Curtis2011 Family Member Join Date: Sep 2008 Posts: 2,950	Rabbit, I was going to write a long post discouraging you from starting your own business, but then I realized that I hate it when people tell me I can't achieve everything I dream of. So... Good Luck! (and I don't know the answer to your question)

04-22-2009, 09:34 PM	#4 (permalink)
Rabbit Banned Join Date: Jul 2008 Posts: 84	Discouragement because I am not yet financially stable? I'm all for constructive criticism, so feel free to share your opinions . One way or another, this is my dream, and I will make it reality. A few naysayers won't change that (and I've already encountered a few).

04-22-2009, 09:41 PM	#5 (permalink)
RT Wolf Family Member Join Date: Nov 2006 Location: Toronto, Canuckland Posts: 1,737	Good, ignore the naysayers. Even if you fail, you'll succeed. If anyone pulls out that old "80% of new businesses fail in the first year" tell 'em that a comparable amount of businesses suceed in the first year that are started by experienced businessmen. How do you get that experience? by failing a lot. You might find Dan Kennedy's books helpful. Good for marketing stuff. I don't have an answer to your question but I can offer "teach a man to fish" advice: start talking to more entrepreneurs. Talk to other brewers, make friends with bar owners, even start talkin to bartenders. Talking to a bunch of entrepreneurs (preferrably successful ones), you can find a great source of advice, inspiration and answers to your questions. Just meet a whole bunch of people. Not everyone will be worth talking to again, but some people are a perfect match for you. Talk to everyone and tell them what you're doing. You never know what someone might come up with after talking to them. I landed a job after talking to a guy I met on my sister's field trip. Meet people, many people. However, I don't see why you couldn't pay yourself a living wage. You could talk to whoever you think is going to be funding you and just ask them this question. Call 'em up. Call a bunch of different sources and just try to talk to someone who can answer your questions. I'm sure different sources have different requirements.

04-22-2009, 10:06 PM	#6 (permalink)
Dot Senior Member Join Date: Feb 2007 Posts: 120	Business, especially your business, can be anything you want it to be. If you want to include a salary for yourself to live on in the seed and/or start-up stages, then include it in the numbers. And sell it to the investors. BTW, I would highly recommend you not seek to take out any loans. Look for angel investors. And you'll need to have a fairly flushed out business plan even to enter the "seed" stage. If not, what options do I have to support myself while I plan and engage in start-up? Another part-time job seems impossible. Ah... how about a job in a beer/brewpub? : ) How much experience do you have in the type of business you want to enter?

Personal Development for Smart PeopleTM Forums

Personal Development for Smart People^TM Forums