MARK KOHLERMain Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, LLC · Owner at Main Street Professionals, LLC

The Big Mistake People Make When Raising Money

17 Dec 2025 · 1 min

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Mark Kohler breaks down three ways to finance a business: borrowing, partnering, or raising capital through SEC offerings. The big mistake is mixing them, like using a participating note that promises both interest and equity. Blending funding lanes creates legal problems that can kill your raise.

Chapters

Either you borrow the money, you partner with someone that's got money or you raise the money through an SEC approved manner. And so you're going to a security route, you're going to partner, you're going to borrow or lend. That's it. And they come with pros and cons. Now let's throw this out too right out of the gate. It cannot work when you try to blend them and I know you think it's easier to raise money when you blend they'll borrow. And the partner concept and the term that's out there on the streets is that this participating note you're trying to raise money and you say hey I'll give you X percent on your money and interest rate and then when we sell I'll give you part of the deal. Okay, you just blended two lanes. Can't drive in two lanes. You're going to get a ticket. Can't do that, you're going to be a problem.