📈 How I Raised $100,000 for my Startup

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Quick note:

I traveled to NYC for the first-ever TRIBE retreat a couple weeks ago.

Networking in person is far better than anything that could be accomplished online.

(I even introduced my girlfriend to another member, who hired her part-time for his startup)

I highly recommend applying to join TRIBE if you’re a business owner.

Next retreats will be in Asheville, NC and Jackson Hole, WY!

I’ll begin today’s newsletter by refuting a common misconception about startups.

In fact, I just had an interaction on Twitter / X that prompted me to write this for you.

YOU DON’T NEED TO RAISE MONEY TO START A BUSINESS.

Check out my interaction with Vasu below.

Click on the image above to see how I responded.

Vasu isn’t the only person that thinks like this.

I started my business with $1,600 we’re just crossed $1.5m revenue since inception.

Anyway, this newsletter isn’t about bootstrapping, it’s about raising money (which is considered far sexier than bootstrapping).

So here’s my experience raising money:

Let’s start from January 2022. My company, Greenbox Storage, is rolling.

I had a great few years running Greenbox and we were doubling revenues every year.

Things were going great but I didn’t really know how to get to the next step…

How I found the investor

It’s probably not the answer you’re looking for, but I found him via my personal network.

(This is one reason why you should relentlessly network and build your rolodex)

The investor was a childhood friend named Aaron who runs a successful landscaping company in Buffalo, NY.

His company was much larger than mine at the time.

(This was important to me. I wanted investment AND partnership with someone who was “ahead” of me)

So I shared what Greenbox Storage was all about and asked if he was interested in getting involved.

He was interested.

The negotiation process

The process was fairly straightforward.

1. I shared the Greenbox Storage’s EBITDA with Aaron.

2. We went back and forth a few times before agreeing to an EBITDA multiple.

3. We agreed on a valuation, then negotiated payment terms.

How did we get to a $500,000 valuation?

If you’d like to dig deeper into this topic, this website gives a great overview of how to value companies using EBITDA.

Long story short, we used a EBITDA multiple around 5.5x to come to a $500,000 valuation.

Here were the payment terms:

He paid $40,000 up front, $10,000 a few weeks later, then the remaining $50,000 over time using seller financing.

Why I sold

Two reasons:

1. I wanted a business partner

This was the main reason. Having someone to bounce ideas off is huge in business.

If you’re on your own, you lack perspective when making decisions.

Also, a partner will bring ideas to the table and take tasks off your plate.

2. Money for Acquisition

At the time, Greenbox had an opportunity to make a profitable acquisition.

I needed some capital to make this happen.

If you want to read about our acquisition of Middlebury Campus Storage, click here (it turned out to be a home run).

Was it worth it?

So far, the answer is yes. Aaron has been a great partner and has been instrumental in the growth of Greenbox Storage.

He has provided ideas and insights that have contributed immensely to the company’s growth.

So if you want to raise money for your business, start networking!

Post on social media, join a peer group, and find investors who believe in you.

Cheers,

Collin Rutherford

Whenever you’re ready, there are 4 ways I can help you:

1. Hire me as a consultant to take your business to the next level.

2. Offshore Hiring Guide: Learn how to hire inexpensive ($6 / hour) offshore talent in 3 weeks or less.

3. Promote your business to 1,800+ business owners by sponsoring my newsletter (only $45).

4. The Startup Toolkit: This comprehensive course provides you step-by-step directions for how to launch and grow your startup.

Cheers,

Collin Rutherford

PS. I should get a beer with this guy.