Funding Businesses with Joseph BarisonziMarch 4, 2021
You Have a Great Business Idea!
Now, how do you raise money and capital for your business?
We recently had an opportunity to sit down and speak (via ZOOM) with Joseph Barisonzi. A business development specialist with more than 30 years of experience in business strategy, has moved over $350 million in capital for multiple businesses and startups. As the CEO of Apicista, LLC, a company focused on digital platforms designed to help private securities, Joseph created sustainable business models, operational plans, and investor acquisition strategies for digital investment portals. I got to know Joseph in his role as an owner, board member, and EVP of Transactions for Global Leaders Organization. He is also active as a Premium member of GLO in the Minneapolis Chapter.
Business Funding Options
According to Barisonzi, “funding and proper funding at the right time is the lifeblood of your business.” When starting a business, it is important to plan out when you need funding, how much funding you need, and where you plan to get the adequate funding needed to launch your business. Funding is the key to starting a business and should be the main priority when an idea sparks a business proposal.
Business Funding for Startups
Your vision for your business is an important selling point to potential investors. Your business plan needs to support your vision and be financially and operationally feasible. It is great to have a plan, and further a vision for that plan, but once you transition that from being your side-hustle or hobby into a business, you have to care about proper funding at the right time.
It is important to repeatedly ask yourself, Do I really want this to be a business?. When asking yourself this question, it is vital to recognize that enjoying an activity and running a business with that activity are two different things. Whether it be baking cupcakes or inventing the latest and greatest gadget, creating a business takes a lot of time and money that need to be heavily considered. Some examples of models that should be developed in the early stages before investment include: business plans, prototypes, and MVP’s.
It is important to be aggressive, yet strategic when looking for funding. If you run out of your access to capital, you run out of the ability to run your business. Continual access to capital will keep your business afloat and in the game. In order to raise capital for your business, you need to invest in yourself. According to Barisonzi, “Ideally, the cheapest and best capital for you to get to launch your business is the capital that you earn.” This does not include money from the bank, which typically only lends you money when you don’t need it, or from the startup or seed investors. Seed investors, venture capital, and angel investors are the most expensive capital there is. You will give up the most control of your company and money in the early stages with these investors.
It is critical to get your business off the ground and as far down the road as you can before you start looking into outside capital and potential investors. Once you are far enough down the road, you need to get the product into the market and prioritize the capital that you earn. This process will allow you to build a track record and increase the value of your company yourself before investors step in and take control. When launching your product into the market segment, positioning is crucial to gain insight on financial implications and introduce your client base.
Barisonzi shared with me four simple steps to follow before looking for investors:
- Make sure you really want to be in business and take on this project.
- Build as much sweat equity as you possibly can.
- Try to earn money from sales in the market.
- Get potential customers to invest in the product.
These are also known as strategic investors who will directly benefit from the results of your business. They are the best next group of investors and financial backers.
Who do I get funding from?
Business Funding Ideas
Here is a list of people you should look to for funding:
- Friends and Family
- Strategic Investors
Business Funding Solutions
Strategic investors can bring a lot of insight to your company from personal experience. They have first-hand experience with your company and have continued to support it for a reason. That reason is mutually beneficial for you and your customer. For example, if you are starting a cupcake baking company, you may look to a unique flour company that you use to be a potential investor. This partnership creates a distribution channel for the flour company as well as establishes a mutually beneficial relationship.
What do I need to do to get ready to raise money from investors?
Business Funding Proposal
When you are finally ready to get funding from investors, you need to make sure that your operations are in order. You should be able to confidently answer the questions of how, when, where, what, and why? One great way to get organized is to enter a business incubation program. Do not get stuck on the idea of a business template! Instead, be confident in your answers and back up your answers with data from your business plan.
The next part of your business funding proposal should include documentation of your answers to these questions. According to Barisonzi, the best way to document your answers is by creating a FAQ that is accessible and up-to-date. The main categories your FAQ should answer are about the product, who is going to do this business, why can these people do it, and how the investors are going to make a return on their money.
- How are the investors going to get their money back?
- How is your income more than your cost of goods?
- Do you wait until you gave an exit opportunity?
These are all examples of questions that your FAQ in your business funding proposal should answer.
Business Funding Network
GLO is the best place to start when looking for a business funding network. GLO has a model that they recommend to all of their members called the “Project Ready, Fund Ready, Raise Ready” model.
- “Project Ready” is when you have the answers you need to those operational questions and the FAQ ready to go.
- “Fund Ready” is when you are ready to receive money from business investors. Make sure you have proper documentation, a bank account, a private placement memorandum, and you are properly incorporated.
- “Raise Ready” is when you are ready to go out and talk to people to raise money. You need to have a pitch deck prepared for various audiences that support your business story. A modern method to pitch your business is to create an explainer video from the customer’s perspective. This video will give potential investors a better idea of your product or service and the potential client base for your market segment.
Business Fundraising Websites
GLO also has a list of what you need to be “Project Ready”, “Fund Ready”, and “Raise Ready”! The list includes documents to complete and other recommended items to best prepare you to reach potential investors.
“GLO helps businesses get ready in all three of these categories and then once your business is ready, we can introduce you to funding sources, investors, financing sources, and eventually onto an investment portal.” – Joseph Barisonzi
Madeline Pernecky is a Dallas based writer for Global Leaders Organization. She is also an undergraduate student at Southern Methodist University, working towards a bachelor's degree in Business Marketing as well as minors in Advertising and Spanish.