Business startup questions

C

CottonEyedHorn

1,000+ Posts
My wife is working hard on starting up her own business w. a couple partners. She would effectively be the CEO and majority owner of the new company. The proforma has already been ironed out and we're working on acquiring startup capital. My question is this: What sort of grants are available to minority owned businesses? If there's nothing available prior to startup, what about after startup?

Also, if there are any of you w. VC connections on this board, or with a history of starting up a new business, please PM me. I would like to find out some more information about what we need to do to get this sucker off the ground.
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Cotton,

I am not that familiar with it, but the Small Business Administration provides government guaranteed loans for start ups with a focus on minority owned businesses. You could probably contact them direct or through your local bank for details. This would a less dilutive option than raising equity. I am familiar with VC rounds, but only for technology based companies. How much capital does she need and what general industry niche is she in?
 
SBA is one of the better sources if you can't find an angel.

i woudl also suggest that the dissolution or abandonment of the business by the partners be very clearly spelled out so that EVERYONE knows what is expected of them, and if things go south what will happen, it the company takes off what will happen. So good or bad everyone knows what the exit/but out formulas are.

Usually the problem is getting out a partner's equity or buying a partner out who doesn't want to really work, of flat needs out for whatever reason. Or the thing goes down the rat hole and it's a fight over who owes what.
 
"Depending on the version of the proforma that's more appealing to investors, between $1.5mil and $10mil. General niche is life sciences. "

Are they undertaking any type of drug development or anything that might require FDA approval? There are not a lot of Austin based VCs or angels that specialize in Life Sciences. FDA approval takes a number of years and requires a very patient investor syndicate. One place you may want to contact is the Austin Technology Incubator. It is affiliated with UT and will help subsidize your rent, research costs and etc. (link provided).

My understanding of the SBA program is that a bank makes the actual loan and the bank gains comfort primarily based on a partial guaranty from the government. However, it would require some asset coverage and not deviate too far from normal underwriting standards. So unless you can demonstrate a pretty clear and reasonable path to profitability, this would likely be problematic.
Austin Technology Incubator
 
Cotton,

Just for clarification sake are they a true life science company or are they providing a product/service for the life science industry (i.e. software, consulting)?
 
It's a true life science company. I hate to be so damn cryptic, but this is one of those "We gotta get there first before anyone else does" things. It's not that nobody is doing it already, but they aren't doing it in the very large market we're targeting.
 
Texas Start Up Blog

Cotton,

Can't blame you for being cryptic. I would recommend using the blog I attached. Here in Austin there is Emergent Technologies, but they almost exclusively focus on life science technology devloped at UT.
 
hmm, you are seeking 1.5 mil to 10 mil in funding? VC is the only realistic route. SBA backs bank loans only if you have collateral.

You don't really need contacts to talk to a VC. They'll talk to anyone.
 
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