Craig,
when you talk about investor there´s a majority of options to look for.
The first thing it is know yourself and what are your main goals with
Creativity Density. I think you already know most part of these
information, although know you need to know if these investor have the same
goal as you, if they have the same values, if they complement you with
something (like: empower you network, gain scale to implement new projects,
or etc.)
I think the model Alex said before it is very closed to the endowment funds
( Financial endowment
Wikipedia)http://en.wikipedia.org/wiki/Financial_endowment,
endeavor it is a organization that has something cool about companies that
they helped and after the program these companies (they don't call startups
other than scale ups´) give some equity to them and these is the fuel to
continue to help new scale ups.(http://endeavor.org/)
Hedge funds and others financial investors will invest in the space if they
saw something unique and they will help you to create a scalable model,
using their money, network, structure and etc. It is basic these. They will
buy equity from you very cheap, invest in the company to transform in a big
thing, with stability and continuous recurrence of money inflows and then
sell these partition very high and you have the rights to follow on, and
also make money.
Looking more close to your case, I enter in the website to understand about
it. So i will give you some advices imagine myself at your seat.
You showed yourself opened to Investors looking to new branches and
replication of creative density model.
· Ok. Who are these people ? Do they have the necessary skills to
be a space operator? Why they don´t open a new space, and want CD brand? I
might be for several reasons, but it is important to know. It could be a
strength they think you have ro other, but in the end you will have to
fulfill or exceed their expectations.
· Is your business ready to be escalated? Core process of the
business are tested, secured, atomized?
· What you going to offer ? Management software? Training?
Branding?
· What this will enable you to do that you can´t do today? Size for
hold your own events (talks, training, networking, etc.)
· Are going to charge for royalties or maintenance? How much?
· How much they will need to invest to build a new brunch? What are
the strategic locations? the boundaries (10 miles range)? the guidelines
for architecture, furniture quality, network, internet, decoration, number
of people, kinds of spaces, communication boards? Do you have partners for
it? How much working capital someone needs in these king of business?
· What are the things you don't want to lose?(very important)
Now you going to need a law partner and a mentor with franchise or MA
experience to help you in these moment. Finally i don't like the idea of
buying the build you rent today, these is a asset that you already
generate money, if you buy it you are going to generated the same money
with more investment. And even if the build it is yours, you need to
depreciated (reinvest the depreciation) and also put in the PL, inside
costs the value of a market rent for that same building, and the business
has to generate money to pay it. otherwise it is a not a good business.
It is a very complex subject and i am more than glad to help you more, if
you wanted. i recommend some short videos that also might help you.
https://www.khanacademy.org/science/core-finance/investment-vehicles-tutorial
PS: Sorry for the bad English.
Att,
Danilo Salgueiro
Co-founder @ LAB 48 Coworking
Em terça-feira, 20 de agosto de 2013 13h22min58s UTC-3, Craig Baute -
Creative Density Coworking escreveu:
Hey team,
I have been approached by three different investors in the last few weeks
for new locations. Creative Density is looking at a second location and
building up the new community for it in a simlar way to how we did it two
years ago. It's very grass roots and will only happen if the community can
be formed before the space opens. Once this process started to happen
that's when investors started to show up.
I know several others have had similar experience so I am hoping I can
have guidance about important questions to ask and possible structures.
What I'm thinking:
Business structure:
Creative Density's current location remains my own domain. They don't get
a chunk of that but they are investing in future locations with the new
location being a new business entity. We will share access to my
intellectual property but in case of a split I will retain control in a
reasonable time frame of transition.
How much money:
They are looking to purchase the building and renovating it. I'm working
on how much money they need to put in beyound that and how to split revenue
and profits.
Do they have a good personality match and
