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Advice on how to raise capital for a start up

Posted on 6/11/14 at 3:08 pm
Posted by deltaland
Member since Mar 2011
90502 posts
Posted on 6/11/14 at 3:08 pm
I've been trying to start up my own business lately and I'm having trouble raising the needed capital. We have 40,000 shares of stock to sell at 42.50 per share with an expected annual return of 11.2 percent per share, and with the upward trend of prices on the industry that could increase.

I just live in an area with very few options as far as investors go. How do you attract investors from abroad?

We need at least 500k to get started but our goal is 1.7 million to do the entire operation. A loan isn't much of an option because I don't have much collateral to borrow against
Posted by LSURussian
Member since Feb 2005
126962 posts
Posted on 6/11/14 at 3:09 pm to
Shark Tank
Posted by BACONisMEATcandy
Member since Dec 2007
46643 posts
Posted on 6/11/14 at 3:13 pm to
or Kickstarter
Posted by Lsut81
Member since Jun 2005
80101 posts
Posted on 6/11/14 at 3:18 pm to
quote:

We have 40,000 shares of stock to sell at 42.50 per share with an expected annual return of 11.2 percent per share, and with the upward trend of prices on the industry that could increase.


Sell me on your start-up... I have deep pockets and money to invest

Posted by I Love Bama
Alabama
Member since Nov 2007
37694 posts
Posted on 6/11/14 at 3:19 pm to
Do you know wealthy people? They normally have wealthy friends.

It happens. I met a guy in his 20's a few months ago that owns four nursing homes now. He did exactly what you are trying to do.

Posted by boosiebadazz
Member since Feb 2008
80182 posts
Posted on 6/11/14 at 3:19 pm to
quote:

How do you attract investors from abroad?


substantiate the frick out of this:

quote:

an expected annual return of 11.2 percent per share
Posted by Hand
far side of the moon
Member since Dec 2007
2064 posts
Posted on 6/11/14 at 3:21 pm to
That's hefty.

Fundersclub and the like

or

Go to a decent sized regional CPA firm that also does wealth management --- if they are worth a damn they will help you connect the dots. There might also be some micro private equity firms in the nearest large city.

or

SBA loan with a UCC on all assets of the business and second mortgages on your homes but you have to find a bank willing to underwrite it
Posted by GregYoureMyBoyBlue
Member since Apr 2011
2960 posts
Posted on 6/11/14 at 3:49 pm to
Way too many questions to answer this legitimately. Best option for many first time or concept stage entrepreneurs is to pursue money from the three F's. Friends, family, and fools. Essentially the "dumb money" that will ride through the ups and downs with you knowing full well they may not make their investment back.
Posted by deltaland
Member since Mar 2011
90502 posts
Posted on 6/11/14 at 3:52 pm to
Kickstarter seemed like it handled a different variety if projects than what I'm looking to do. I was going to try Fundable but their monthly costs are outrageous IMO.

I have an investment guy who is handling my private placement memorandum and seeking investors. I pay him a small percentage of what he raises for me but he hasn't sold any stock and has been trying for 8 months. He claims he receives nothing but positive feedback from investors but none have pulled the trigger. I'm trying to find answers as to why they possibly aren't doing it and also looking for alternative routes to raise capital.
Posted by deltaland
Member since Mar 2011
90502 posts
Posted on 6/11/14 at 4:01 pm to
Well our business is hatching, growing and selling catfish fingerlings to commercial farms for food fish production. I have been doing this my entire life and have the connections and customers to get my own farm and make more money. We would hatch 20 million fish per year and sell 15 million at the end of the growing season. Typically they sell for 90-113k dollars for 1 million fish depending on size.

Overhead costs can run from 700k to 1 million dollars per year depending on feed prices and weather patterns. I already have sales locked down so being able to sell the fish isn't an issue. There is a massive shortage of fish in the industry driving up the prices while feed prices have dropped and are expected to continue to drop on average due to increased soybean production in Brazil.

The farm bill passed this year included a USDA inspection for fish imports that us expected to great reduce imported catfish products and increase demand for domestically raised fish. They also passed a crop insurance program expected to be implemented in a year or two, so that will reduce our chances of failure due to unexpected crop loss.

This post was edited on 6/11/14 at 5:29 pm
Posted by jimbeam
University of LSU
Member since Oct 2011
75703 posts
Posted on 6/11/14 at 4:26 pm to
quote:

The farm bill passed this year included a USDA inspection for fish imports


There aren't any kind of USDA loan programs for this type of situation?
This post was edited on 6/11/14 at 4:28 pm
Posted by The Spleen
Member since Dec 2010
38865 posts
Posted on 6/11/14 at 4:37 pm to
quote:

The farm bill passed this year included a USDA inspection for fish imports that us expected to great reduce imported catfish products and increase demand for domestically raised fish


Thanks Obama, amirite?


Good luck.
Posted by foshizzle
Washington DC metro
Member since Mar 2008
40599 posts
Posted on 6/11/14 at 5:21 pm to
quote:

If you're serious then post your email or email me


I believe this is the first IPO I've seen on this board.
Posted by deltaland
Member since Mar 2011
90502 posts
Posted on 6/11/14 at 5:22 pm to
quote:

Thanks Obama, amirite?


More like Thanks Thad Cochran


All it does though is hold imports to the same standards as domestic fish through the USDA.

Currently the FDA inspects foreign grown fish and only inspects about 2% and they don't hold them to the same standards that the USDA holds us to. Now the imported fish, which has been found many times to contain illegal antibiotics, chemicals, and hormones, will have to either change farming practices to be similar to ours or have their fish banned.
Posted by Cmlsu5618
Destin, FL
Member since Sep 2010
3763 posts
Posted on 6/11/14 at 5:26 pm to
Bitco....


I won't say it.
Posted by DownSouthDave
Beau, Bro, Baw
Member since Jan 2013
7366 posts
Posted on 6/11/14 at 5:56 pm to
I have no idea about how raising money works. No idea at all.

But if you've been in he business and have the connections with buyers, can you not go to them for investments? Would it be worthwhile for them to be involved in multiple levels of the business?
Posted by deltaland
Member since Mar 2011
90502 posts
Posted on 6/11/14 at 6:34 pm to
quote:

Would it be worthwhile for them to be involved in multiple levels of the business?


I tried that but the issue is that the farms who purchase stocker sized fingerlings are mostly located in Alabama and Eastern MS...the water table there is farther down and it's not feasible to get deep artesian well water to run a hatchery and raise your own fingerlings. Here in the delta it's easier to hatch catfish and raise fingerlings due to a much easier water supply. So most food fish farmers here hatch and raise their own fingerlings, and the guys over in East MS and Alabama just buy fingerlings from independent fingerling farmers in the delta.

The issue is that those farmers don't want money tied up into another farm that is an entire state away because they can't watch it. And there only a few large farms over there with that kind of money..the majority of the farms are small family farms. The large corporate farms are in the delta due to the flat landscape being more feasible to construct numerous ponds in one area.

Here is a map to kind of show how the industry is set up. It's from 2001 and a lot has changed since then but it's still basically the same areas, just the acreage goes up and down depending on the economy and such. It's been on a decline since 2008 when the economy went to shite but now it appears we have stabilized and from talking to farmers I know we should have a net growth in acreage this year due to good demand and high prices. I know one farmer who is putting 4000 acres back into production that he took out 2 years ago.

Posted by DownSouthDave
Beau, Bro, Baw
Member since Jan 2013
7366 posts
Posted on 6/11/14 at 6:43 pm to
Makes sense.

I have no knowledge on your industry, but I remember reading the thread a while back about domestic vs import catfish. Interesting stuff.

Good luck with the $.
Posted by deltaland
Member since Mar 2011
90502 posts
Posted on 6/11/14 at 6:50 pm to
Posted by barry
Location, Location, Location
Member since Aug 2006
50337 posts
Posted on 6/11/14 at 7:39 pm to
quote:

deltaland


I'm gonna go Mr. Wonderful on you and ask

What advantage do you provide over anyone else doing this?

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