Ask Entrepreneur - Money

Finance

In a second investment round, can the managing founder protect his equity in the company if he does not invest?

I am a manging founder and one of a group of first-round investors of a company building a restaurant chain. We are in the midst of raising capital for the first store. But if we need additional capital for a second store, I don't plan to invest again. Can I protect my equity or will it be diluted along with that of the other investors? If the second round investment is for a higher share value, is it common practice to give first-round investors a discount on reinvesting (besides their right to first refusal) or do they have to invest at the same value as the new investors?
Rosalind Resnick
Finance

Would it be better to put down 20 percent, 33 percent or 50 percent toward the purchase of an existing business?

I am looking at purchasing an existing business with a good history, and I want to maximize my leverage. I have no debt and don't need to take that much money out of the business. I would prefer lower payments and lower financing with a balloon at the end of five years. Then I could use the profits from this business to continue buying other businesses.
Rosalind Resnick
Marketing

How do I market to wealthy individuals?

We prepare and deliver healthy gourmet meals that are customized to people's diets. How do I market this to the wealthy class without spending a fortune?
Kim T. Gordon
Marketing

How can I persuade clients to renew their web hosting subscriptions?

I run a web hosting company. Some of my clients' one-year contracts will end in October. I plan to send them a letter asking them to renew their subscriptions and need advice about what to say.
Kim T. Gordon
Starting a Business

Starting a new product line

I am a 20-year-old female who is thinking of starting a new bath and makeup preparation line, but I'm afraid I don't have enough experience. I have a lot of wonderful ideas, but I don't know where to present them. I would appreciate advice and an idea about how much starting a new line can cost.
Tim Berry
Finance

How do you increase perceived value of a company that wants to attract potential investors?

My company operates in a highly competitive environment in a specialized category. To gain more power in this category, we are looking to raise more money. If you could create a list of Top 10 Things that represent value for investors, what would those be?
Tim Berry
Franchises

Can you help me understand the difference between various franchise fees?

A franchise I'm interested in mentions a fee of $20,000 and then lists capital requirements of up to $235,000. Can you clarify the difference between the two and explain the initial setup costs a franchisee is expected to pay?
Jeff Elgin
Marketing

Can I buy a kit to guide our company through the corporate identity process?

Our family-owned company needs to consolidate its image and rebrand. Before we consult an image specialist, we want to develop cohesive positioning. Can I buy a roadmap-type product for the initial internal diagnosis?
Kim T. Gordon
Marketing

Should a gift basket service use the print or online version of the Yellow Pages?

I was about to sign a 12-month contract for an online Yellow Pages listing when I read that the print version is far better than the online version for a service like mine. Which should I choose?
Kim T. Gordon
Growth Strategies

What criteria should I use for employee recognition?

I am trying to develop a non-cash incentive program to motivate and reward production employees for overall safety practices and work ethics. What criteria should I use for initial nomination, and should bi-lateral employees as well as supervisors and area managers be included in the nominating process?
Penny Morey
Starting a Business

What kind of license do I need and what protective steps should I take to start a home-care business?

I have experience in the home-care field and would be the sole employee for the time being. I'm concerned about the licensing process and also about protecting my endeavor from possible lawsuits.
Nina Kaufman
Starting a Business

How do I get homeowners' coverage and coverage for my home-based business?

I operate a printing business with two full-time employees out of the basement in my home. Companies are refusing to provide homeowners' insurance because the business is in the same building. Can you offer any advice?
Nina Kaufman
Growth Strategies

What are the legal and tax ramifications of an Indian company creating a U.S. branch?

Our IT company in India offers SAP onsite and offshore consultancy services. I plan to open a branch office in California and want to know the best way to do this.
Nina Kaufman