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Money, Business & Finance Ground >> Looking for investors and need assistance


5/5/12 2:53 PM
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Dojosensei
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Member Since: 5/19/02
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As many may know, I own Rings and Cages, Inc. www.ringsandcages.com and have been posting on the UG/OG since the 1990's.

A little background on the business:

Started in 2006 in a small detached 1 car garage that was existing on my property. The building was not insulated and I you could literally see through areas of the walls. The roof had to be covered by a new tarp every couple of months as it leaked. There was no heating or cooling in the building. I started designing rings, cages, floor cages etc... and worked in the garage and outside for a year in the weather etc... building my idea.

In 2007 I purchased a 30x50 pole building with a dirt floor and a wood stove for the cold days. I ran the business out of the building and added another 40 ft to the building in 2010 for a pro wrestling, mma and jujitsu school. I ran this school for a year until the need for more shop area became the number one need. I tore down the wall separating the two building and now my shop is 30x90 ft. I have finally hired an office person, I have a few private contractors that assist with various projects as they come in.

It is now time to expand again as we have once again outgrown our currect space. We are also looking at building an inventory of the most common products that we sell. Floor cages, floor rings, cage panels and bag racks as well as stocking our supplies. We are looking to purchase an old high school with a full size gym and 12000+ sq feet of space that sits on 3 acres. We are also looking at expanding into our own line of gear, targets for target ranges both public and law enforcement as well as other projects we have designed but not been able to expand into thus far.

We are looking for investors to make this happen and need advice from some of the OG Money members on how to go about getting investors for this expansion.

Any info is appreciated either here, via private message or via email ringsandcages@gmail.com

Thank you all in advance for your assistance.
5/5/12 3:37 PM
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LiveWire
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Member Since: 11/15/04
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 Have you run the normal traps to ground for financing already?
5/6/12 8:10 PM
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Dojosensei
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Not sure I follow what you are asking.

Have we looked into financing, yes, what we need for building, renovations and expansion is going to be more than a bank will finance in today's market. We actually hired a management company and they had asked about leasing to own etc... unfortunately the building we want and have wanted for years is a straight up sale, no lease etc...
5/8/12 4:08 PM
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justin@gosscpa.com
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Justin Goss, CPA, MSA
In order to round-up investors you'll need to inspire confidence in your finances and your vision.

You've mentioned you hired a management consulting company, so you probably won't need me, but if you need some help in building up the integrity of your financial statements, or need projections, please feel free to shoot me an email.
5/10/12 1:54 AM
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Dojosensei
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More than likely as close to 2 mil as possible. I know what the building, renovations, inventory of current products and inventory of new products will run, huge marketing campaign is going to also be an ongoing endeavor.

Basically looking to expand into boxing/mma gear, keep an inventory of equipment, branch out into a different field with range targets for shooting ranges as I have people in place as salespeople for this on the private and law enforcement sides.

Upgrades on equipment etc...

Arrangement, not sure exactly. I hired a management company to make sure we don't grow "too fast" and then fall like I am seeing happen with a lot of companies. We discussed investors, percentages of the company etc... as well as exit strategies for the investors etc... Kind of open to discussion honestly, I have been approached by various investors already, hasn't quite fit as of yet.
5/11/12 8:43 AM
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Dojosensei
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Thus...the management company. We turn down and have since we opened about 90% of business that comes to us. Either we haven't had space or enough help etc... Now we have the correct help, rocking through orders, orders aren't slowing down, never have thus we are now needing the space as we are still turning down a ton plus all of the private label work we do. It's there, with the space, new lines and marketing (which we have never done outside of pay per click ads) we will be good.
5/11/12 3:28 PM
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Dojosensei
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Unfortunately the nearest rental areas are the cities. The new building is 2 blocks away. We are in the country so driving into the city to oversee a different building just isn't feasible, where on the other hand, 2 blocks is.

We probably could do it less expensive, however, expansion into other products and entire lines of gear needs a good amount plus marketing. Marketing for us is a new thing, never had to market at all, but with launching new lines etc... marketing is key.
9/10/12 7:31 PM
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Dojosensei
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Update. if I do renovations myself on the weekends, I can get into the building and get operational immediately for right at 200K. I won't be able to expand into the other avenues like bags, gloves, headgear etc... immediately but it is the only thing I won't be able to get running.

Any ideas on this?
9/10/12 10:09 PM
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Dojosensei
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Problem is getting the investors to do it at this point. Met with one today that I had been waiting on for over a month now. He shows up, one of those guys that doesn't let you get a word in edgewise and then tells you everything about MMA, problem is, most of it is incorrect.

Needless to say, he wanted to move the business to his location, in the shithole old abandoned part of town and it would shoot EVERYTHING we had in mind in the foot.

Needless to say, I turned down his offer as I have my vision of what needs to happen and it incorporates numerous avenues, not just rings/cages. Getting into the building is the tough part right now, paying for it once in, not so much.
9/17/12 12:59 PM
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thefightingsheep
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I don't mean this to sound wrong, but why aren't the management consultants directing you towards financing alternatives? They know your business and the local investment community better than the OG.

If you (and they) do not have any contacts at all there is probably an investment networking group that meets periodically somewhere in your area. You could try to stop by--making sure you have your five minute pitch as to why you have a good investment opportunity in mind. If you have a local university graduate business school you could inquire about whether they represent an investment group or at least have contacts with them.

Most investors have both target ROI and target regions and markets for getting that ROI. There is probably someone out there, but most are not looking at a multi-million dollar investment in sports clothing (or however you would describe your business) so starting with the whole universe of investors and weeding out all of those who invest in different geographies or who are looking exclusively at IT, biotech, etc. deals is going to be time consuming. Rather than waste your time you should try to get a good local contact--whether it is the mgment consultants, the business school, your banker (even if they won't loan you the money, they may know the investor scene) or someone else to steer you to a more reasonable list of candidates.
9/18/12 1:27 AM
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Dojosensei
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MMAFanJustin, the issue with moving it to his location is he only wanted the rings and cages, he didn't want everything else that went with the company like events, training, charity work, sponsoring fighters/gyms/events etc... I am all about giving back and not willing to give that up in the least bit.

Not only that, really came off like the kind of guy that would have someone shadow me for 3 months and then the door locks would be changed. That and it would be moving to an old part of town and a 45 min drive one way where my walk now is 50 ft and with the new building here it would be 3 blocks.

But that's just me.
9/18/12 10:18 AM
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thefightingsheep
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Getting an investor is going to mean giving up some independence. That's the nature of the deal. Your read on that guy was probably correct but if you're inflexible in running your company I don't think you'll find an investor who will touch it. Their mindset is "how is this going to be good for me?". That usually involves a targeted rate of return (high in the case of investing in a small business) and some type of contingecy management/ownership where, if that return isn't met, they can change the direction or management structure of the company to try to get better results.
9/21/12 1:15 AM
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Dojosensei
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See, I'm ok with modifying some things, just not giving up the charity, school, events etc...

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