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www.BFS-USA.com Alternatives to Traditional Finance for Start-ups Sam Thacker 512-990-8756 [email protected]

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Page 1: Alternatives to Traditional Finance for Start-upsfiles.meetup.com/7176182/AIEA Presentation 8-4-2014.pdf · Alternatives to Traditional Finance for Start-ups Sam Thacker 512-990-8756

www.BFS-USA.com

Alternatives to Traditional Finance for Start-ups

Sam Thacker 512-990-8756

[email protected]

Page 2: Alternatives to Traditional Finance for Start-upsfiles.meetup.com/7176182/AIEA Presentation 8-4-2014.pdf · Alternatives to Traditional Finance for Start-ups Sam Thacker 512-990-8756

www.BFS-USA.com

Our Team

• 39 years of combined commercial banking

• BFS works with B2B companies*

• Offices in Austin and Saint Louis

• Customized solutions

*B2C – equipment finance also Francoise

Luca

Sam Thacker

Carol

Crangle

Page 3: Alternatives to Traditional Finance for Start-upsfiles.meetup.com/7176182/AIEA Presentation 8-4-2014.pdf · Alternatives to Traditional Finance for Start-ups Sam Thacker 512-990-8756

www.BFS-USA.com

Goals of Presentation

1. Leave here tonight with three ideas that you can immediately use in your venture.

2. Understand the importance of building a company around your product or idea.

3. Learn about some non-traditional financing techniques.

Page 4: Alternatives to Traditional Finance for Start-upsfiles.meetup.com/7176182/AIEA Presentation 8-4-2014.pdf · Alternatives to Traditional Finance for Start-ups Sam Thacker 512-990-8756

www.BFS-USA.com

Basic Tips

• Think enterprise, not just product

• Single product companies higher risk

• “Piggypack” products high risk

Page 5: Alternatives to Traditional Finance for Start-upsfiles.meetup.com/7176182/AIEA Presentation 8-4-2014.pdf · Alternatives to Traditional Finance for Start-ups Sam Thacker 512-990-8756

www.BFS-USA.com

“Virtual” Companies

• Easy to scale

• Contract manufacturers

• Third party logistics

• Not traditional bank customers

Page 6: Alternatives to Traditional Finance for Start-upsfiles.meetup.com/7176182/AIEA Presentation 8-4-2014.pdf · Alternatives to Traditional Finance for Start-ups Sam Thacker 512-990-8756

www.BFS-USA.com

Critical Enterprise Components

Component of Enterprise Value

Management 25%

Market need for product / service 25%

Solution to market need 25%

ROI, making profits 25%

Page 7: Alternatives to Traditional Finance for Start-upsfiles.meetup.com/7176182/AIEA Presentation 8-4-2014.pdf · Alternatives to Traditional Finance for Start-ups Sam Thacker 512-990-8756

www.BFS-USA.com

Financing Virtual Companies

• Microloans

• Purchase order financing

• Inventory financing

• Invoice factoring

Alternative Methods

Page 8: Alternatives to Traditional Finance for Start-upsfiles.meetup.com/7176182/AIEA Presentation 8-4-2014.pdf · Alternatives to Traditional Finance for Start-ups Sam Thacker 512-990-8756

www.BFS-USA.com

Microloans/non-banks

• Accion

• BCL of Texas

• BiGAustin

• PeopleFund

• Credit unions

Page 9: Alternatives to Traditional Finance for Start-upsfiles.meetup.com/7176182/AIEA Presentation 8-4-2014.pdf · Alternatives to Traditional Finance for Start-ups Sam Thacker 512-990-8756

www.BFS-USA.com

Purchase Order Financing

• Need Firm PO from creditworthy customer

• Needs to be at least $500,000

• PO finance company taken out at invoicing

Page 10: Alternatives to Traditional Finance for Start-upsfiles.meetup.com/7176182/AIEA Presentation 8-4-2014.pdf · Alternatives to Traditional Finance for Start-ups Sam Thacker 512-990-8756

www.BFS-USA.com

Inventory Financing

• Needs to be at least $250,000 of need

• Third party warehousing preferred

• Raw materials and finished goods

Page 11: Alternatives to Traditional Finance for Start-upsfiles.meetup.com/7176182/AIEA Presentation 8-4-2014.pdf · Alternatives to Traditional Finance for Start-ups Sam Thacker 512-990-8756

www.BFS-USA.com

Invoice Financing

• B2B - creditworthy customers

• Nearly unlimited size

• Start-ups okay

• “Cures” missed opportunity

• Seasonal, cyclical businesses

Page 12: Alternatives to Traditional Finance for Start-upsfiles.meetup.com/7176182/AIEA Presentation 8-4-2014.pdf · Alternatives to Traditional Finance for Start-ups Sam Thacker 512-990-8756

www.BFS-USA.com

Equity vs. Debt

Alternative financing methods often use ways to

leverage assets to avoid using more equity.

Every company needs enough equity to balance

their debt load.

Page 13: Alternatives to Traditional Finance for Start-upsfiles.meetup.com/7176182/AIEA Presentation 8-4-2014.pdf · Alternatives to Traditional Finance for Start-ups Sam Thacker 512-990-8756

www.BFS-USA.com

Questions???