1. The Color(s) of Money Financing Growth… Without Going to the Bank

2. Today’s Objectives 1.Be the Shark, Not the Mark Rules of the Funding Game 2.Solids or Stripes The Colors of Money 3.What’s the Wager How Use Determines Source 4.Tricky Combo Shots Non-Bank Options

3. 1. Be the Shark - Not the Mark

4. The Mark 1.Looks in the Wrong Places 2.Lacks Knowledge of Process 3.No Clear Budget 4.No Business Plan 5.Can’t Possibly Pay it Back 6.Too Early – Risky 7.Too Late – Behind the 8 Ball

5. The Shark 1.Financial Responsibility –Personal Credit Score –Business Profitability 2.Clear Plan –Use of Funds –Business Model –Payback with Timelines 3.Team –Relevant Industry Experience –Business Sense

6. Case Study: Shark Tank What Caused Them to Compete Over This Deal? What Were the Impacts of Each Offer? What’s the Relative Valuation? Which Would You Choose?

7. SHARK TANK Shark Tank

8. SpikeBall KEVIN Loan $500k @ 9% 10% warrant @ $0 cost $0 valuation DAMON $500,000 20% of business $2.5 million valuation

9. Solids or Stripes: Loan or Equity

10. Mix & Match Uses to Sources VENTURE CAPITAL ANGEL CAPITAL LOANS & CREDIT SELF FINANCE SAVINGS Tangible Intangible Cash Credit Equity

11. Tangible Uses of Funds Tangible Purchases Equipment Real Estate / Office Building Supplies & Raw Materials Positive Cash Flow Receivables Ongoing Concern

12. Intangible Uses of Funds Take a Salary Fund On-going Losses Create a Proof of Concept File a Patent or Draft Designs Travel Marketing / Advertising

13. What’s the Wager: What You Need Determines Where You Look

14. Rule: Match Your Sources & Uses Identify “Use Of Funds” –Set Clear Budgets –Know What Things Cost! Forecast Growth & Payback! –Know What “Drives” the Business –Know When You Break Even

15. What is Breakeven? Break Even Cash Flow Positive Discounted Cash Flow Internal Rate of Return (IRR) Cost of Capital

16. Features & Benefits Interest Rate < Rate of Return Term Or Tennor < Useful Life Other Covenants or Terms People: Can You Live With Them?

17. Example: “Build a Distribution Ctr” USES Land & Building Trucks and Equip. Inventory New employees SOURCES Mortgage (6%) Vendor Lease (10%) SBA Loan (12%) Mezz Loan (18%)

18. Case Study

19. Tricky Combos (Non-Bank Funding Sources)

20. Use What You’ve Got “The money will come from wherever it is now”

21. Where it is Now

22. Where it is Now (2) Collect Receivables Hold Payables Cut Down Inventory Find Hidden Inventory – Not in the System / Samples Sell Equipment Expired but Sellable products Discretionary Expenses

23. Looking Deeper and Broader

24. More Skin in the Game PERSONAL CREDIT Convert 401k to Stock Credit Cards Leveraged Savings Mortgage Second Mortgage Third Mortgage Life Insurance (Var. Ann.) Margin Accounts (Stocks) Title Loans (at a Bank!)

25. OPM Friends Family Customers Vendors Equip Leasing Government: SBIR / OPIC Private Grants Affinity Investors Angel Groups PEGs Venture Capital

26. New & Improved OPM KickStarter / Indiegogo New JOBS Crowdfunding General Solicitation

27. Case Study

29. Combination Shots Bridge Loans Venture Loans Mezzanine Loans Angel Guaranteed Loans Convertible Stock SPACS, PEGs, PIPES Pink Sheets (OTC)

30. Make Your Own Rules: If You Can Imagine It… “Project Debenture” Interest Royalties Options / Warrants