The last time we checked on Larry Morton and Don Duke of Indianapolis-based Micro-Link Technologies Inc. ("Raising Money," July 1995), they were in the throes of raising money from banks and equity investors.
The good news: Micro-Link got a new bank and increased its line of credit. The bad news: The company is still searching for that all-important layer of equity capital.
For Micro-Link, the stakes could not be higher. Working with Hiarc Inc., a software development firm in Orange, California, Micro-Link developed a data storage and management product called StoreMaster. "The amount of data on computer networks is growing at an exponential rate," Duke explains, "and companies need a turnkey storage solution with intelligent software."
But the company went as far as it could with debt. And Micro-Link devoted considerable cash flow from its industrial computer business to product development. Now, with StoreMaster ready to launch, Micro-Link needs equity capital to kick off its sales and marketing efforts.
Micro-Link's trials and travails over the past year demonstrate just how difficult raising capital can be-even when you've got a great deal. In addition to several dangers inherent in doing deals, the degree of difficulty is compounded by the fact that financing sources are not always what they represent themselves to be. In the final analysis, Duke and Morton decided it would be easier to raise the money they needed themselves than to rely on others to do it for them. Below is a brief history of what led them to this decision, as well as some of the lessons they learned along the way.