|
|
|
Budgeting Advice for New Craft Businesses
Budgeting Advice for New Craft Businesses BY: Eileen Bergen www.theartfulcrafter.com Every crafter or, for that matter, every business person must learn to control spending from the very onset of the venture. As a matter of fact, you should not...
How Do You Treat Your Affiliates?
If you've been working online for any length of time you know that one of the best and fastest ways to make money with your products is to offer an affiliate program.
So let me ask you this - how do *you* treat your affiliates?
You might...
Rocky Smolin Makes Leasing Option Available to Small Manufacturers
E-Z-MRP, the leading manufacturing software system for small manufacturers, announced a new pricing and product structure. According to Rocky Smolin, founder of Beach Access Software, makers of E-Z-MRP, “We see a distinction between those small...
The Devine Secrets Of The Ya Ya Lease Purchase Hood
The biggest secret of conducting a successful lease purchase business is to have a plan. I know don’t grown. You need to know what you want to do however, before you can do it. So secret number 1 is to have a plan of action. Set up daily goals for...
Your E-Business Strategy: Is It Love ... Or Fear?
I read recently that every human thought originates from either love or fear. The more I thought about it, the more true it became. I began to apply it to business - after all, every business success or failure originates ultimately from human...
|
|
| |
|
|
|
|
|
|
Getting Your Venture Lease Approved
Each year venture capitalists fund more than 2,500 start-up companies in the U.S. Many of these companies try to conserve their equity capital by approaching venture-leasing firms to secure equipment financing. By obtaining lease financing, these savvy firms are able to use their equity capital for high-impact activities like recruiting key personnel, product development, and expanding their marketing efforts.
What are the qualities that make some start-ups more attractive than others to venture lessors? Here are ten factors that most venture lessors evaluate to decide which start-ups to finance:
Caliber of the Management Team
Most venture lessors consider the start-up’s management team to be the most critical success factor for the venture. Though it can be challenging to quickly evaluate management talent, there are several qualities that venture lessors consider. They look for experienced managers with high integrity and a proven history of business performance.
Quality of the Venture Capital Sponsors
Another important factor for most venture lessors is the quality of the start-up’s venture capital sponsors. Venture lessors look for experienced venture capitalists with successful investment performance over a number of years. The venture capitalists should also have good reputations for dealing fairly with creditors serving their portfolio companies. Before entering new lease arrangements, most venture lessors verify that the start-ups’ venture capital sponsors are actively supporting them.
Soundness of the Business Plan
Successful start-ups usually have compelling, well-articulated business plans. Lessors look for signs that the start-ups have promising market opportunities, clear and credible projections, and reliable financial statements.
Cash Position /Monthly Burn Rate
A yardstick used by many venture lessors to measure risk is the start-up’s projected cash consumption rate. The ratio of available cash to the start-up’s monthly burn rate is a useful measure. It crudely determines how long the start-up can last before a new equity round is needed. The lessor views a transaction as less risky if the start-up can make full payments during a significant portion of the lease term without raising additional equity. Most lessors look for a ratio that supports at least 9 – 12 months of the start-up’s operation.
Equipment Quality
The quality and intended use of the equipment is an important factor for most venture lessors. Most lessors look for transactions involving equipment that is essential to the start-up’s operation. Additionally, the equipment should have acceptable collateral value and be readily re-marketable in the equipment aftermarket.
Product Prospects and Revenue Track Record
If the start-up is in
the development stage and has yet to sell products, venture lessors generally look for products capable of establishing a strong market position. If the start-up’s product is already in distribution, lessors look for strong monthly or quarterly revenue growth. A poor reception of the product in the early stages, when measured against the business plan, can often signal a faulty product launch or faulty product concept.
Valuation History
A valuation history records the share prices of stock sold to investors by the start-up. Unless there is a good explanation, most lessors look for significant share price appreciation over successive offering rounds. The assumption is that the start-up is making steady and significant progress in its development, which will be reflected in rising share values.
Balance Sheet Strength
Venture lessors usually evaluate a start-up’s working capital to ensure that the start-up can make payments when due. Along with an analysis of the start-up’s burn rate, lessors use traditional working capital measures like the current and quick ratios. Lessors also look for other signs of balance sheet strength, such as: low to moderate leverage; positive tangible net worth (inclusive of subordinated debt); and minimum paid-in capital of $7 - $10 million.
Outside Professional Involvement
Most venture lessors view the involvement of reputable and successful outside board members as a positive factor for start-ups. A reputable CPA firm, law firm, institutional partners and/or service providers are also viewed by lessors as positive. These professionals can bring valuable expertise and contacts that can help the new venture to succeed.
Payment Performance
As with more traditional lessees, venture-leasing companies frown upon poor lessee payment histories. Most venture lessors expect lessees to have satisfactory payment histories, unless good explanations can be offered. As expected by other vendors, satisfactory payment of bills by customers is where the rubber meets the road. Whether the lessee is a start-up or a Fortune 500 company, most lessors view prompt payment as sacrosanct.
While venture lessors use additional factors to make their credit decisions, these ten factors seem to be used universally. Though most of these factors are subjective, they have stood the test of time for venture lessors in making informed and reasonable credit decisions.
About the Author
George Parker is a Director and Executive Vice President of Leasing Technologies International, Inc. (“LTI”). Headquartered in Wilton, CT, LTI is a leasing firm specializing nationally in equipment financing programs for emerging growth and later-stage, venture capital backed companies. More information about LTI is available at: www.ltileasing.com.
|
|
|
|
|
| Finance - Leases-Leasing Ezine Articles |
| EzineArticles.com allows ezine or email list publishers to upload or download free expert content that can be used within email newsletters or websites. |
| ezinearticles.com |
|
| Finance: Leases Leasing Articles from EzineArticles.com |
| http://ezinearticles.com/?cat=Finance:Leases-Leasing Free Content For Your Ezine or Website http://creativecommons.org/licenses/by-nc-nd/2.0/ Why use your ... |
| ezinearticles.com |
|
| Leases Leasing - Money & Finance Articles |
| Leases Leasing - Money & Finance Articles. Money & Finance | Accounting & Payroll | Bankruptcy | Business & Loans | Credit Tips | Currency-Trading ... |
| www.article99.com |
|
| Finance » Leases Leasing » Absolute Article Directory |
| Absolute Article Directory: Finance, Leases Leasing. |
| www.absolutearticle.com |
|
| - Leases-Leasing |
| By David Springer | On January 29, 2006 | In Leases-Leasing | Rated. Short on cash, but need equipment? Consider leasing what you need. ... |
| www.articlebar.com |
|
| Leases Leasing |
| You are here: Article Directory arrow Article Directory arrow Finance arrow Leases Leasing ... Leases Leasing. Articles ... |
| www.rumorist.com |
|
| Long Term Car Rental Italy Auto Rentals Leases Leasing Rome Milan ... |
| Long Term Car Rental Italy Auto Rentals Leases Leasing Rome Milan Florence One Way Paris London Frankfurt Madrid Lisbon. |
| www.ideamerge.com |
|
| europe car rental leases leasing one way rentals long term renault ... |
| pictured is the Renault Laguna Estate, With Renault tax-free, short-term auto leasing you get the exact, brand-new vehicle you reserve, plus unlimited miles ... |
| www.ideamerge.com |
|
| Private Fleet - Finance, Insurance, novated leases, leasing, CHP ... |
| New Car Broker Australia. Private Fleet sales discounts on your new car purchase, no haggle, no hassle saving $1000s off all new and used cars for private ... |
| www.privatefleet.com.au |
|
| Projector Leases, Leasing Companies for LCD, DLP, LCOS projectors |
| Projector leasing programs and services. Choose a company. |
| www.projectorcentral.com |
|
| Category: leases-leasing |
| Category... leases-leasing. Results 1 - 3 of 3. Search took 0.01 seconds. Page 1 of 1. Buy or Lease: Which Automobile Transaction is Better? ... |
| www.articler.com |
|
| John Dellagnese & Associates: offices, officespace, lease, leases ... |
| It takes two companies to bring you the premier Corporate Property Development group in Northeast Ohio: the talents of John Dellagnese and Associates ... |
| www.dellagnese.com |
|
| John Dellagnese & Associates: offices, officespace, lease, leases ... |
| Welcome to our Tenant Login Page. * Forgot your password or haven't received one yet? Email us tinah@dellagnese.com or call 330-668-4000 and we will reply ... |
| www.dellagnese.com |
|
| The-Arts-Magazine.com - Leases-Leasing |
| Home arrow Article Links arrow Finance arrow Leases-Leasing. Main Menu ... Mosets Tree. Leases-Leasing. Listings. There are 0 listings in this category. |
| www.the-arts-magazine.com |
|
| OmegaMotors.com - Your Money - Leases - Leasing Overview |
| Blue Book retail & trade-in value reports on used vehicles. Kelley features prices on used cars, trucks, street and dirt bikes, ATVs, scooters, ... |
| www.omegamotors.com |
|
| Entertainment Guide - Leases-Leasing |
| Sunday, 03 December 2006, Home arrow Article Resources arrow Finance arrow Leases-Leasing ... Mosets Tree. Leases-Leasing ... |
| www.entertainment-resource-directory.com |
|
| - Leases-Leasing |
| Mosets Tree. Leases-Leasing. Listings. There are 0 listings in this category. spacer.png, 0 kB. spacer.png, 0 kB. download joomla modules download joomla ... |
| www.healthcare-resource-guide.com |
|
| FINANCEDEPARTMENT.COM- Finance, Mortgages, Leases, Leasing ... |
| Finance, Mortgages, Leases, Leasing, Brokerage Houses, Mortgage Lending. |
| www.financedepartment.com |
|
| vehicle leases leasing guide and facts |
| vehicle leases leasing guide and facts. Under the federal Consumer Leasing Act, you, the consumer, have a right to information about the costs and terms of ... |
| www.shopperfavorites.com |
|
| - Leases-Leasing |
| spacer.png, 0 kB. spacer.png, 0 kB. Home arrow Article Resources arrow Finance arrow Leases-Leasing. Mosets Tree. Leases-Leasing ... |
| www.cars-directory-guide.com |
|
|