Five months ago, Jane and I decided that May 29th would be a good deadline for raising capital. If we could find enough startup money by then, the business would move forward. If not, we'd move on with our lives. We're almost at the magic date, but the option of bank financing has made our strategy slightly more convoluted:
-If we can fully fund the business with equity capital by May 29th, great!
-If we can fund at least 25% of the business with equity capital by May 29th, we'll give ourselves three months to raise the rest of the money through a bank loan.
-If we're unable to do either, we'll shelve the business and I'll start looking for a brewing job in the area.
So how close are we? It's very hard to say. We've learned that when you give people a fixed deadline, they wait until the the last possible moment. At least, that's what we're hoping. If I had to guess, I'd say the odds of winning the lottery are better than funding the business entirely with equity capital. I'd also say that funding 25% of the business with equity capital is an attainable goal. We'll see how it goes.
The uncertainty brings me to the point of this post: If you want to start a business where investment capital is required, have your potential investors sign documents that say something like "I intend to invest in RePublic. Upon written notice from Joe and Jane, I will contribute $25,000 within 14 days." I imagine it would be a powerful tool for both planning and persuasion. When it was suggested to me, I chose not to do it because I had already set a fixed deadline and was concerned that a call for commitments would be seen as a desperation move. Learn from my mistake!
In other news, we recently found a very strong candidate for a location. If we're still alive after May 29th, we'll let you know where it is as soon as we notify the appropriate government officials and neighborhood associations of our intent.