Manufacturing startup could go a few directions for investment

alextexmexalextexmex subscriber Posts: 1 Member

Hi all,

I have an opportunity to open a manufacturing business within an industry that I have worked for 12 years. My industry is rapidly changing, with the two top manufacturers seriously deteriorating with quality and reliability issues. I manufacture a product that is crucial to a consumer good. The US sales of that consumer good are increasing by 10% yoy. I also have great relationships with executives of top goods producers who could purchase my product.

All of the stars are aligning and I feel like this is an opportunity of a lifetime. The issue is - my startup costs are high and my funds are low. I require expensive machinery to create my product, however I do have written commitments from 3 of the 4 largest producers in the industry to purchase significant monthly volumes of my product for the next 2 years. This would easily be enough to create a revenue stream within 3 months of operation (3 months for set-up and R&D) - that would lead to breaking even within 12 months.

If I were to try to raise the amount that it would cost me to set-up my factory + machinery, + 6 months of run time, I'm looking at about $2 million. What's the hive mind perspective on how I should structure generating this $2 million? Should I be looking for investors, bank loans, and how much equity should I give up? Would love to hear thoughts or feedback on this opportunity.


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