By now we’ve learned that community capital is real and can be raised and invested in local businesses through Direct Public Offerings. Working with us a business can structure a round of capital raising ranging from $250,000 to $10,000,000 through the tool (stay tuned for a write-up on Water FX for the $10 million DPO, our biggest to date). The irony is that sometimes a business with the right plan to attract $5 million in investment capital has a hard time raising the initial funds to structure their DPO in the first place (costs range from $15,000 for our DPO Boot Camp to $25,000 for a 1-on-1 DPO “soup to nuts”).
You may be reading this and shaking your head at the thought of coming up with $15,000 dollars, a difficult investment to make today even though it has the potential to raise a game-changing amount of investment capital in 9-12 months (the amount of time it can take to get your DPO approved and to start raising capital). Luckily, we have a few out-of-the-box ideas for how to help fund your DPO.
Crowdfunding: Cutting Edge Capital is a partner with IndieGOGO, and several of our clients have raised their DPO fees through IndieGOGO. You can check out their profiles here: https://www.indiegogo.com/partners/ceca.
Foundations: If you are a non-profit, consider approaching a foundation for the start-up costs for a DPO. If a $15,000 grant from a foundation can be used to help you raise a million dollars, we are going to go ahead and call that a really effective way to leverage funds!
Bridge loans: Local banks, credit unions, and other community-minded lending institutions might be a good source for gap funding while a DPO is in preparation. Cutting Edge Capital intends to work with several institutions to help our clients create these relationships. If you’re interested in partnering with us on a bridge loan, either as an entrepreneur or a lending institution, contact us.