Which first, company or funding?

yusiye · January 2007

I`m here debating with my partner, whether we need to form a company first or get the funding first?
What if our company doesn`t get the fund in the future? then what will happen next to the company? And what about our tax status?

robertj · January 2007

It is possible to "line up" the funding before forming your business entity. It is not usually well received by the investment community - but it is possible.
However, without an entity - you can only receive funds in the form of a personal loan.

AMEX555 · January 2007

That`s absolutely true; no business vehicle, no funding except by way of personal loans. You could however, begin to line up investors prior to establishing the entity but investors usually require a personal guarantee too. Sort of a catch-22 scenario.

robertj · January 2007

Many debt sources (like the SBA) require personal guarantees on loans to startups. However, it`s less likely for that to be part of an equity raise.
We believe the key is to have the "optimum" capital strategy for you and your business.

biznessman · February 2007

Robert,Does SBA approve loans on a well written busniess plan or the personal guarantee is the only choice?

Which first, company or funding?

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