“Where’d you get the money?” — How I funded my startup.

As many of you know… in January of 2006, I split with my business partner and had decided at that point that I WOULD continue in this journey of entrepreneurship. One of the most defining time periods of my entire life for sure.

Here I was. 23 years old. Left with a handful of inventory and equipment left from my partnership split. Time to get to work.

One of the most common questions I get asked when I speak in front of young entrepreneurs is “Where did you get the money?”

Unfortunately, youngsters that are starting a business these days and entering the world of entrepreneurship believe that they have to go and sell equity in their company (for most of them it is just an idea at that point). A business is becoming defined by how much money they raise versus how much they actually make. I’m here to tell you that you can still bootstrap and you don’t have to give away your equity. Most are surprised to find out that I (currently, because let’s face it, you never know what might happen In the future) own 100% of my business.

So how did I do it?

First, the obvious. Family and friends. There is no one that is going to have more faith in you than family and friends. Sure, they may tell you that you’ve lost your freaking mind (you probably have), but that’s ok. You need that. They’ve lost theirs too for taking on such a high-risk investment. YOU!

Don’t give equity if you can help it. Ask for a LOAN. Only ask for what you need (Yes. You’re a business owner now, sit down and figure out that number.)

Personally guarantee their money! If you lent someone $25,000 and their business failed, would you want to be told, “It was a high-risk investment. Sorry.”? No. You would want to be told, “I’m so sorry. I gave it my all and I failed, but I swear to you that I WILL pay you this money back.” Then freaking do it! Seriously, if my business failed tomorrow, I’d work my ass off to make sure those people got their money back. They WOULD get their money back.

The second is obvious too. Credit Cards. So, I did have a little help on this one. My father is smart in a lot of ways, but he is definitely smart with money. He taught me the importance of saving, good credit, and more. When I was in school, he helped me get my own credit card (where he was also on the account) and I used that credit card for textbooks and other school expenses. This helped me build credit so when I applied for that first business credit card, I was approved. Today, we have $70,000 of credit available on credit cards. Fortunately, we pay them off weekly, but it’s nice to know that it’s there should we ever need it.

Finally, recognizing the right opportunities. Let me tell you about Roger. Roger was a customer that walked into my business to look for a mini dirt bike for his son. I instantly connected with Roger. He’s the type of customer that reminds you why you got into business in the first place. Lot’s of energy. Great attitude. Fun to talk to.

“Wow! How old are you? You own this place!?” he asked.

His interest obviously pumped my young 23-year-old self up! I ended up giving him a tour of our showroom and warehouses, worked up a deal on that new mini dirt bike and spent the rest of the afternoon getting lost in business conversation. Then, he and his son went on their way with their new dirt bike.

Later that night, I sent Roger an email that said something like this…

Hey Roger!

I just wanted to drop you an email and say thank you for coming by today and for your business! If I can ever assist in any way, please don’t hesitate to reach out.

As an entrepreneur, I’m always looking for opportunities to grow my business, so if you know of anyone that would be interested in investing into my business, please pass on my direct information.

Thank you again for your business!

Roger replied, “I would be interested in investing in your business, Collin. Send me some more information.”

A couple days later, I received a $45,000 loan from Roger.

Keep your eyes open. You never know, that next customer may just be your next investor.

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