Can I use Start up funding for paying employees

nothinglikeit

I am starting to research funding options for my start up. I was wondeirng how you present the purpose of the financing to the funding source. I also was wondering if and why "Paying employees" would be a vialble reason to seek funding. I ask because I`m not sure if investors want you to cover something like that.

MNGrillGuy

I`d want a breakdown of sources of funds (D&E,) and uses of funds (Equip, inventory, direct labor, SG&A, work cap...).  At least 1 year detailed cash flow analysis.  All assumptions, sales drivers and risks.
Yes, paying direct labor should be included if neceassary to reach BP goals. 
 

nothinglikeit

raise capital I`m reffering to having a fund for payroll. I wasn`t sure if that was something that investors would fund.

robertj

In general, funding sources (whether debt or equity) anticipate that some amount will be used for operating expenses, which would include payroll.
Most investors expect the founder(s) to receive enough "salary" to live on, but usually resist paying "top" dollar.
The payroll expense should be covered in your business plan - both the narrative and numerical portions.robertj2007-5-17 12:37:10

JanetF

I think this all depends on the type of funding you are able to obtain and how detailed your business plan is. If you are able to get an SBA loan, that could undoubtedly cover employee payroll...at least temporarily. If you believe your business will take off with profits very fast and just need a little push to get started, this might be a good option.