Evan Carmichael advises against seeking investor funding or loans to launch a creative business. Instead, start with service work that generates cash immediately, validate demand before spending, and reinvest profits to grow without giving away equity or taking on debt.
Chapters
Hi, I'm Evan Carmichael, and welcome to another edition of #AskEvan. In today's video, I'm going to answer a question from one of my readers, Ino, who is trying to raise capital and asks, I need $10,000 to establish my organization which deals with talent— that's acting, creative writing, poetry, singing, dancing, modeling. I've written some scripts that I need to produce under my organization using actors and actresses in the organization and also produce some other projects with the above talents. So he's asking about raising capital, and my thought here is, honestly, your best bet is to bootstrap this thing. Startup capital is the hardest money to raise. You end up spending most of your time out there trying to raise capital, and you get a really bad valuation. If you're going to get an investor, an angel investor, to give you money, they're going to take a big chunk of your company because you don't have anything yet, you don't have money coming in, and if you're gonna go to a bank or you're gonna go to another organization that's gonna lend you money, because you're so new, you're gonna probably have a really high interest rate. So you always get the short end of the stick when you're trying to raise capital as a startup. My best advice for you would be try to bootstrap it up, try to focus on the services that you can do without spending money. And as a new business, I hate spending money before making money. You know, you might have to do a website, some business cards, but Try not to spend any money until you have money coming in. That way you know that your product or service is working, because a lot of entrepreneurs will spend tons of money on an idea they think is great, and then nobody wants to buy it. So you've flushed all this money down the toilet. So if you can focus on making money first, even if it's a little bit, and investing those profits back into the business, you know you're going after a market where you can actually make some money. So try to focus on those services instead of products to start, because there's no investment besides your time. And I would strongly encourage you to try to bootstrap it up to the point where you have that money coming in, and then you can invest your profits back into your company. So maybe not what you wanted to hear, but, uh, the best advice that I can give you based on the question that you asked. So I hope that helped. I'd love to hear your thoughts and feedback if you want to leave a comment below, and please give it a thumbs up too if you like the video, and stay tuned for the next episode.
