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(Ideas for fund raising)
 
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As I don't know much of the in and outs of fund raising I'll start from the beginning as when this is handed down, someone in the same position may know as little as myself.
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Some common financing option for a new or recent start up business along with the pro's and con's are:
 
'''Personal Savings:'''
 
Self explanatory, utilizing what money you can generate yourself from working or savings.
 
''Research'' - over 50% of small business and non-profits are financed this way. Doesn't work when initial operating expenses are very high. Approx 50% of small businesses don't survive the first two years of operation.
 
''Advantage''s - Total ownership, ownership of profit and complete control
 
''Disadvantages'' - Significant liability as what you bring in will make or break, also limited to your earning potential. Very slow process to raise capital.
 
''Thoughts'' - As this company is already far beyond what a single personal savings could accomplish (unless you have a very large savings account of 9 figures), I will move onto other ideas. 
 
'''Boostrapping:'''
 
Start with a small investment, start the business, which OSE already has, then utilize revenues to grow business.
 
''Advantages'' - same as Personal savings however this would take significantly less time to raise capital. 
 
''Disadvantages'' - This works in limited scenarios, although we may be able to work utilize prototypes to help in this area.
 
''Thoughts'' - We would need something to create revenue with such as marketing and selling kits, such as having a crate with Blueprints and DVD instructions included with all of the necessary parts to build a tractor or some other prototype that is far along. Then market the "kit" to areas and ship the kit for revenue to put back into the business, keeping the "non-profit" in place. As of now I don't think this is in place, although it could be taken from idea to reality fairly quickly, the amount of revenue or capital raised would be difficult to estimate. Could have large earning potential.
 
'''Loans:'''
 
Borrow money from a bank, individuals etc.
 
''Advantages'' - Similar to self financing, however, Loans are based on the ability to pay back, and as of now I don't see any revenue coming into OSE, this could be utilized if necessary if the above idea with kits were utilized.
 
''Disadvantages'' - Perfect credit to financing something risky, I believe Banks would view OSE as a risk in regards to rate of return for the Bank. Interest rates would also be very high due to high risk aspect.
 
''Thoughts'' - Could be utilized to create a new branch, or if a quick influx of money was needed for something, but probably not a legitimate source of funds for anything else. Also creates collateral issues, if something were to happen the land/ business would be seized and sold. 
 
'''Venture Capital:'''
 
Comes from a group of investors that aggregate a pool of money to be used by a Venture Capital Firm to fund starting companies. The start up company then would give equity and or stock in the company in order to receive money. the investors are basically getting in on the "ground floor' making their money on an "exit strategy" which would be the sale of their stock once the company is offer public, or once the company is large enough that the stock prices are worth substantially more. 
 
''Advantage'' - Large amounts of money quickly
 
''Disadvantage'' - Need to have a solid business plan to convenience VC, as well as giving up equal capital so the VC own part of the business.
 
''Thoughts'' - Most new technology ventures are financed by Venture Capital due to having a higher "risk". Banks are much more likely to invest in "safe" ventures that have the ability to be paid back or something tangible to recoup losses if necessary. Although new ventures are unpredictable they can produce a very significant profits if successful.
 
'''Grants:'''
Free money from Agencies, "investors" that believe in your cause, foreign governments that may want to utilize the technology.
 
''Advantage'' - Money doesn't have to be paid back, great way to expand a non-profit with zero risk.
 
''Disadvantage'' - Extremely time consuming process for each grant, many companies specialize in grant proposals to increase the likelihood of receiving a grant. Would need to hire someone to work full time on grant research and grant proposals. 
 
''Thoughts'' - Another route I believe would be a positive way to proceed with. It would take additional manpower, however the first grant or two should more than pay for the cost of the man power needed. Also, no risk involved other than the funds needed for the manpower.
 
'''ICrowd / True Fans:'''
 
Although not officially operational yet, it is a community of investors and inspired entrepreneurs that want to help small businesses and non-profits succeed. It works similar to a social media site in where investors can sear the site and or be grouped up with businesses that match their criteria for investment.
 
''Advantages'' - Seems like a good way to reach a vast amount of people, although individual contributions would be small, the overall sum of the whole could be significant.
 
''Disadvantages'' - Site is still in a developmental stage
 
''Thoughts'' - although not up and running it is a similar idea to the Tru Fans concept in where the individual contribution is small but the over all contribution is significant. Like with the Tru Fans, it would HAVE to be marketed and someone would constantly need to scour the Internet for areas to make OSE known. Ideas such as this thrive on quantity of individuals reached. People want to constant information, how what they are contributing is helping and what exactly is transpiring on a daily basis. This I believe would have to be the domain of the Community Manager, constant updates to make each individual contribute feel as if their 5$, 10$ or 20$ a month was extremely important or significant. Emails, updates, constant new video streams etc would be mandatory.
 
 
'''Overall Conclusion'''
 
Bootstrapping, followed by Grants and an Icrowd / Tru Fans concept, would best utilized for the well being and protection of the company. Other options are viable, however I would only consider them after the previous are exhausted.
 
Why I placed Bootstrapping first? Bootstrapping would be something we could control with very low capital needed to begin the process. Prototypes are already built, along with instructions (blue prints, DVD's) being constructed presently. The kit's would be on an as ordered basis. Once an order comes in the customer would be given a lead time depending upon the amount of orders processed before them. All materials would then be able to be purchased/constructed with the order, boxed and shipped at buyers expense. Obviously there would be a large learning curve, the first lot of kits sent out would probably net close to zero profit until the process is fie tuned. However, once the process is in place, the ability to generate funds for OSE would be limited to the customer base we could reach. This could also be the basis in later stages for a "for profit" section. This would also have the added benefit of creating a working laboratory where technicians would be able to perfect instructions to decrease build time as all kits should be assembled and disassembled to ensure fit and function prior to shipping.   
 
Grants would be a close second as it involves zero risk and only requires the investment of employing an individual. An added benefit is due to OSE being considered a "Green Company" there are numerous grants from not only companies but governments all over the world. Utilizing the non-profit as well, this should be a major source of income considered OSE is in the area sustainability, and more and more companies want to be seen as environmentally friendly and adding to society in a positive way.
 
Tru Fans/I-crowd is a great idea, would need a community manager to utilize this aspect. OSE would HAVE to have a significant online presence all over the world. Constant updates would be needed to contend with today's growing thirst for knowledge. People want transparency (which OSE has) as well as constant information about everything. Webpages and social media would have to be very professional and polished, as well as containing update material almost daily. Very important position to fill for OSE regardless of what route is chosen. In today's business environment, social media can be a make or break avenue.

Latest revision as of 04:19, 17 March 2013

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