Finding Startup Funds

[Kegger's467]

I am just starting out and creating a solid business plan. I was wondering if anyone had and suggestions about find a small loan or fed grant of about 2,000 dollars to get trademark and copyright stuff done, for working on the club character and things that come along with building a brand experience for potential investors. Also, when it comes time to raise to projected 1.5- 2 million for the first two clubs I have found people don't find a nightclub a real business investment. Are there any venture capital companies or investors that someone might have used in the past that could help me now.

Thank you,
Brandon

[Joe]

You don't have $2000 of your own money? You'll never get funding without 30 to 50% of your own money as backing.

[Kegger's467]

I do have $2000 to do a short start up and initial branding and that shouldn't be to bad I would be down to my last dollars but I can do it no problem. When you say 30 percent or more for a bank does that mean I should look into selling shares in the company and leverage that for a bank loan? I have no significant assets to put up so I think this and working with the SBA would be the best way. Any opinions and information would be helpful.

Thank you,
Brandon

[Joe]

I hate to be the bad guy but, here goes.

Bars are the hardest businesses out there to get anyone to lend money on. Most banks won't even entertain the thought of loaning money unless you have most of the capital, the experience and so on.

To just go to a lender and say “I want to open a club" without any upfront capital and some major experience under your belt and expect them to dish out a few hundred thousand or even millions isn't going to happen.

I've worked with potential bar owners that had half of the money up front and the bank still wouldn't carry the paper.

I think that you should go to your personal banker and ask him/her the same question. As for the SBA, they are real skeptical about the bar business unless the figures and stats look great.

Sorry that I don't have a more positive answer for your question but it's a lot harder then it looks or sounds.

[Kegger's467]

thank you for the feedback. This just means I need to try harder.

[DavidLastQue]

Hi guys,

I have just signed up to be a member of this exciting site, as I am also looking for seeding money to set up a club for showcasing talents.

I thought of accumulating funds from passionate people from this industry, such as DJ's who find dificulties finding gigs over here in Asia as they are not as well known as Pete Tong or Jon Digweed. Or a simple reason that they have never spin in Asian soil.

I did a conservative calculation of setting up a simple club with recycled stuff that we have accumulated throughout the years from so many clubs that come and went.

It's abt Malaysian 50,000, its abt USD12,500 and divide it up with 20 passion DJ's around the world who can have a showcase once in a while here and we can cut a deal for them that they will earn a % of the nights cover charges. So its like having a regular tour in your own club. Later stage if god permits, we can have several clubs around the region own by DJs, run by DJs and make popular by DJs.

If I can find 20 DJ's that see the passion in me to invest USD 625 per head to have a equal share of the total investment at the end of the year and a entourage fee every time they come over, plus if time may permits we can also tour other Asian countries to advertise our outlet here in sunny island Penang in the north of Malaysian Pennisula.

What do you think? Workable

[ministry]

i'll be the bad guy. guys, if you have no experience and no money, forget it, you will never own your own club ! owning a bar is NOT all glam and glory, it is a pain in the butt 90% of the time. you will not get a loan. finding a investor who will front you some cash ? unless you know donald trump forget that too. work in a bar and save your pennies !

[anotherguy]

I am just starting out and creating a solid business plan. I was wondering if anyone had and suggestions about find a small loan or fed grant of about 2,000 dollars to get trademark and copyright stuff done, for working on the club character and things that come along with building a brand experience for potential investors. Also, when it comes time to raise to projected 1.5- 2 million for the first two clubs I have found people don't find a nightclub a real business investment. Are there any venture capital companies or investors that someone might have used in the past that could help me now.

Thank you,
Brandon


Item 1 - Trademark and Copyright
While having an attorney fie the paperwork for you will ensure that the filings go smoothly, it is not necessary on either trademark or copyright.

For copyright go to:
http://www.copyright.gov/

I must admit, I am not quite sure what you intend to copyright. Copyright's are used for literary works; musical works; dramatic works; pantomimes and choreographic works; pictorial, graphi and sculptural works; motion pictures and other av works; sound recordings; architectural works.

Nevertheless, the current cost for most basic filings is $45. If you can't figure out how to complete the appropriate form using the included instructions it is unlikely that you will ever be able to navigate the process of obtaining a liquor license.

For Trademarks go to:
http://www.uspto.gov/main/trademarks.htm

You can complete a online filing for standard character drawing trademark (not a designed logo. you just type in the exact phrase you want to trademark) in under 20 minutes if you follow the on-screen instructions.

A registration of a designed logotype will take a few minutes longer. The cost for online filing ranges from $275 to $375. Be aware that new filings are currently estimating 12-18 months for completion. Once again if you cannot complete the process using the provided instructions and additional resources on the site you will most likely be completely bewildered by the process of obtaining a liquor license and the other various permits and licenses that may be required in your area.


Item 2 - General Advice
I would recommend not only getting some hands on experience in the bar business, but going to a local community college and taking some basic business and accounting classes. If you are serious about pursuing this as a business then go out and get to it. Get a job as a bar back and work until you become a manager somewhere. Not only will you gain experience but you will also begin building a network of suppliers, potential employees, etc.


Item 3 - Financing
While one may exist somewhere, I have never encountered a VC firm that would go anywhere near a start up bar/restaurant/nightslub with a ten foot pole. Much to great of a risk for their taste. That being said, if there was one, they would make the whole deal not worth it for you as they would take atleast 60%-70% of the ownership leaving you exhausted for little reward at the end of the day. Save the money you make while getting experience in the business so you bring cash to the table in any potential outside investor scenario down the road.

I wish you luck. Just take things one step at a time.

[Kegger's467]

Thank you Anotherguy your information is very helpful. I am finishing up my degree in entrepreneurship at CMU and hope to find a place to do my internship this Sept in order to learn from a bar or nightclub owner. I hope to make some connections at The Show this March and maybe someone who has some money burning a hole in their pocket.

[mikefsu]

I need an investor or investors for an upscale nightclub in Florida. The start up fee is 3 million dollars and the location is a no brainier to make money back in the first year.
Thank you
Mike Orlando

[fernando]

i'll be the bad guy. guys, if you have no experience and no money, forget it, you will never own your own club ! owning a bar is NOT all glam and glory, it is a pain in the butt 90% of the time. you will not get a loan. finding a investor who will front you some cash ? unless you know donald trump forget that too. work in a bar and save your pennies !

Exactly.... I have asked banks, the SBA, Score, etc for loan money back when I needed it... Its not gonna happen, you got to face the facts, 80 percent of bars/nightclubs fail w/in the first year... I can only research, research, research, and work work work, to even have a chance to be one of the 20 percent that actually make it...

[Kegger's467]

I think the stat on club closure is misleading. I think to many stupid 40 year old alcoholics think they can start a bar and fail because the closest thing to running a business was buying for minors in front of the liquor store. I also think the idea of opening a club with loud music and alcohol is dead. People want more and with more comes the necessary huge start up funds. There are too many different owners in the market anyways and the only brand names are on the liquor bottles. The build up off the electric cowboy and coyote ugly give me hope for my idea. I think finding a specific market is important it's not good enough to just wait for people 18-92 to walk through the doors. There is no distinction between clubs except for size and a small bit of local novelty. It's up to entrepreneurs to bring interactive technology into the market and I'm not talking about club keno. Hopefully Kegger's will be able to do it and maybe not but it's not just loud music and water downed drinks, clubs need to entertain and put on a show. That why Kegger's will go for the college market in every major college town in the United State with it's interactive competitions between students all over the country. The industry lacks the brands and power that comes with multiple location nightclubs.