I previously wrote about alternative options that entrepreneurs can use to fund their business instead of selling equity. Today I’d like to look at a specific example from the Shark Tank that could have allowed a business owner to keep 40% of his business.
My favorite example of this is St. Paul native Rabbi Moshe Weiss with his very cool Soundbender. If you haven’t seen the episode, there is a summary here. The Rabbi’s situation was a common one: he had a large order that he could not fill from a large retailer.
There is a simple solution that could have saved the Rabbi from selling 40% of his business: work with a purchase order finance company to fill his order and then turn the receivable in to cash through factoring. Using these two financing methods would have allowed Moshe to continue growing his business as quickly as his orders come in. It would also have provided him with help managing his growing accounts receivable, allowing him to stay focused on his teaching and the sales of the Soundbender.
Here’s the Rabbi doing a demo of his product:
