Money Magnet: How to Attract Investors to Your Business

273 Pages·2008·1.14 MB·English

by  J. B. Loewen

Praise for Money Magnet
“Every ambitious private business owner should understand the role of
investors and how to attract them. Money Magnet is an indispensible
guide to the process.”
— Austen Beutel, Chairman and CEO,
Oakwest Corporation Ltd.

“Money Magnet begins with a startling proposition: some businesses
succeed more than others simply because they know how to raise
money. By sharing these processes, tools and secrets, Jacoline Loewen
is daring Canadian entrepreneurs to dream bigger than they’ve ever
dreamed before.”
— Rick Spence, Entrepreneurship Columnist for
the National Post and PROFIT Magazine
“Don’t put another nickel into your business until you have read this
book. Money Magnet is Financing 101 for entrepreneurs and owners
who want to grow their business. How to get the money you need at the
price and terms you deserve in eleven easy chapters fi lled with war sto-
ries from the success stories and train wrecks of fi nancing history and
those who lived them.”
— Greig Clark, Entrepreneur (College Pro Painters
and ARxx Building Products) and Venture
Capitalist (Horatio Enterprise Fund)
“Business owners attracted to Money Magnet will be treated to a wise, com-
prehensive and readable book. Jacoline Loewen’s dandy advice-fi lled guide
shows you how to bring in the money you need to build your business.”
— Michael de Pencier, Founder and Former
Publisher, Toronto Life; Chairman,
Investeco Private Equity Fund
“Knowing how much you need to start a business is one thing; knowing
where and how to look for those funds is quite another. Th ere are many
books on ‘how much’ but Money Magnet shines in its straightforward,
honest advice on ‘where to fi nd it.’ It’s the ‘rainbow’ that can lead you to
your ‘pot of gold.’ ”
— Ken Wong, Business and Marketing
Strategy, Queen’s School of Business

01_475690-ffirs.qxp 2/27/09 8:08 PM Page viii
J.B. LOEWEN
Copyright © 2008 by Jacoline Loewen
All rights reserved. No part of this work covered by the copyright herein may
be reproduced or used in any form or by any means—graphic, electronic or me-
chanical without the prior written permission of the publisher. Any request for
photocopying, recording, taping or information storage and retrieval systems of
any part of this book shall be directed in writing to The Canadian Copyright
Licensing Agency (Access Copyright). For an Access Copyright license, visit
www.accesscopyright.ca or call toll free 1-800-893-5777.
Care has been taken to trace ownership of copyright material contained in this
book. The publisher will gladly receive any information that will enable them to
rectify any reference or credit line in subsequent editions.
Library and Archives Canada Cataloguing in Publication Data
Loewen, Jacoline, 1960–
Money magnet : how to attract investors to your business / Jacoline Loewen.
Includes index.
ISBN 978-0-470-15575-2
1. Small business—Canada—Finance. 2. Private equity—Canada.
I. Title.
HG4027.7.L64 2008 658.15’224 C2008-902204-1
Production Credits
Cover design: Jason Vandenberg
Interior text design: Tegan Wallace
Typesetting: Thomson Digital
Printer: Quebecor–Fairfi eld
All fi gures sourced from Jacoline Loewen, unless otherwise noted.
John Wiley & Sons Canada, Ltd.
6045 Freemont Blvd.
Mississauga, Ontario
L5R 4J3
Printed in the United States of America
1 2 3 4 5 QW 12 11 10 09 08
To my loving sons, Ross and Craig
01_475690-ffirs.qxp 2/27/09 8:08 PM Page viii
TABLE OF CONTENTS
Acknowledgements xi
Part I: Why Your Company Needs Private Equity 1
Chapter 1: What You Should Know about Attracting
Money 3
Chapter 2: Th e Big Diff erence: Other People’s Money 25
Chapter 3: Taking on a Private Equity Partner: How
It Works 41
Part II: Building Blocks of Money Magnet 65
Chapter 4: Th e Food Chain: Match Your Business with the
Right Investors 67
Chapter 5: What Angels and Seed Funds Need 91
Chapter 6: What You Should Know about Venture
Capitalists 105
Chapter 7: Th e Valuation: Create the Framework for
Fund Managers 127
Part III: Getting “Investor Ready” 141
Chapter 8: Four Brutal Questions and Why You Need to
Answer Th em 143
Chapter 9: Creating Plans Th at Get You Funded 163