Getting Funded
As an entrepreneur, are you having trouble getting funded? Do you want to get support amidst the pandemic? In this episode of Incorporating Superpowers, host Justin Recla and guest Ken Alozie focus their discourse on getting a business funded despite the hindrances posed by the pandemic. Ken is a managing partner at Greenwood Capital and a business mentor in SCORE. He commits himself to guide start-ups in need of business and marketing plan optimization and getting funded smartly. Tune in and know more about the best practices and bits of advice for your business to flourish.
Justin Recla:
Welcome back to Incorporating SuperPowers. Today we’re going to be talking about money. I know we’ve talked about money before in the past, but things are going to be a little bit different. Because I know there’s a lot of small businesses out there, a lot of entrepreneurs out there, that are having trouble getting funded. And it’s not just about taking a PPP loan or standard ways of funding. My guest today is going to be talking to you about the fact that what we don’t realize is, what most business owners don’t realize is, that you can go to lots of different banks and you’re never going to get funded, and that’s because a large portion of businesses nowadays is not fundable.Â
But my guest today happens to be a partner, a managing partner over at Greenwood Capital. And he’s got a program that allows businesses to get funded now, and getting funded the right way, and taking all the steps to do that. And, more importantly, he’s also a mentor for SCORE. And I know SCORE does a lot of great things in the world, and I’m excited to have this conversation. My guest today is Ken Alozie, and he’s here to share with you how you can get your business funded and how you can get the support you need even amidst the pandemic through SCORE. Ken, welcome to the show today.
Ken Alozie:
Hey, thank you, Justin. Good to be here.
Justin Recla:
Fantastic. So Ken, let’s set the framework a little bit. Greenwood Capital. First off, let’s start there. What is Greenwood Capital and who do you serve?
Ken Alozie:
Absolutely. So, Greenwood Capital Advisors is essentially a debt capital markets firm. We raise debt capital for middle-market companies across the U.S. We also provide advice. Oftentimes, companies come to us and they think they need one type of capital. But after sitting down with them, we realized they actually need something else.Â
And so, it came about because years ago, and I’ve been in the financial field over 20 years, when I was starting off on Wall Street, one of the first things I noticed was that when large companies needed to raise capital, they didn’t go to a bank and fill out an application and hoped to get approved. What they would do was they would consult their outside team of advisors, maybe Goldman Sachs or JP Morgan. That team would take inventory of where that company is, its strengths, weaknesses, what they’re trying to raise, their current debt load, and they would actually come up with a plan to help this company raise capital and execute on that plan.Â
And some of our clients were actually banks. And so, banks, who are in the business of providing capital, when they need capital, don’t leave it up to chance. They have a team of advisors that they consult. And so, the irony today is what I see is those small business owners who’ve never done it, they’re going about it on their own without help, without advisors.Â
And so, Greenwood was created in part to address that, to provide more than just the capital, but the advice, the resources, the guidance to make sure that not only do you get the capital you need but at a rate that’s affordable and sustainable for your business. And also providing that ancillary advice and having that additional third party outside of your business to help you think through a lot of these complex issues because they are complex for your typical small business owner to navigate.
Justin Recla:
Especially with today’s social media. Right? Everybody’s an expert in something. And the internet exists. And you go out searching, there’s all this information. There’s a lot of misinformation. There’s just a lot of bad ways of getting money. There’s a lot of good ways of getting money. But when a business owner’s hurting for capital, and they’re looking to get the capital so they can expand, they can grow and so forth, taking the wrong kind of money, getting into the wrong situation, can actually be more devastating to a business than staying where they’re at.
Ken Alozie:
That’s exactly right. And I’ve seen plenty of examples of just that where a business owner took on capital, and then they realized that it was maybe the wrong type of capital. Too expensive. Instead of monthly payments, maybe it was weekly payments, maybe even daily payments, and just not sustainable for their business. The problem was now they’re coming to us after having done this, and they’re not in a position to refi that capital for one or more reasons. And so, they’re essentially stuck with it and either has to grow and pay it off or just eventually default. So, you’re seeing a rise in corporate debt structuring companies that are there to help companies through that, and it’s often a painful process. So, if you can do it right the first time, you can literally save years in your business and a ton of frustration.
Justin Recla:
Well, and a ton of cash, especially if it’s expensive capital that somebody’s taken out. That’s something that I don’t think is really discussed in the business world. And there’s a lot of good-intentioned people out there, and there’s a lot of scams, a lot of frauds and stuff out there as well. But stopping in for a moment, taking a breath, and really evaluating a capital-based situation, it is worth the time to educate yourself on how to make things happen and make things happen in the right way. So, where does SCORE come into play with this for you?Â
Ken Alozie:
Absolutely. So, oftentimes, a lot of business owners, they’re very early. So, maybe they just started a business, or they’re thinking of starting, so they’re too early to get the interest of a bank or an investor. And even if their idea is investment-worthy, they may not know how to position their company or idea or product to capital sources.
So, SCORE comes in as a resource that’s free that these small business owners can tap into for help in either launching a business, everything from how do I put together a business plan or a marketing plan? Should I consider an LLC versus a C Corp or an S Corp? Are there resources that SCORE can connect me with on the accounting side or the legal side? If you go to SCORE.org, there are a ton of resources, including pre-recorded webinars, handbooks, guides, and financial models. And if a business owner goes through a lot of that, they get a really good foundation so that by the time they engage with a SCORE mentor, then their questions are a little bit more nuanced.Â
So, SCORE really just helps provide that free resource for entrepreneurs who may be used to just figuring everything out themselves. And it’s a nice objective, independent third party. We’re all volunteers as mentors, so we’re doing this for free around our own schedules. The majority of us are retired, either retired business owners or retired corporate America execs. I’m kind of a mix of both. I started a business in ’08, sold it a few years later. And I still work full time. I’ve been working for over 20 years, but still work full-time in the financial field.Â
So, the value that I can bring to the SCORE clients is that I can tell them what the small business lending landscape looks like in real-time. I’ve read thousands of business plans. So, I advise SCORE clients on how to position it properly, particularly if they’re going to use it as a vehicle for capital. I can help them think through what makes the most sense as far as raising capital for your business. Does a loan make sense? If a loan makes sense, does it make sense to go through the SBA program? People ask a lot about grants and crowdfunding. So, I can answer a lot of those questions as well.
Justin Recla:
That’s fantastic. On the backside of this conversation, we’re going to dive a little bit more into capital, some of the questions that you should be asking yourself, you should be asking for your business, you should be asking somebody what that looks like and how to move your business forward in the right direction. But before we go on break, Ken, where can people go find more information about you?
Ken Alozie:
Sure. You can find me either on SCORE.org and find my mentor profile. I’m also on LinkedIn. If you search for my name, I don’t think you’ll find anyone else with that first and last name combination. You can also visit my company’s website at www.greenwoodcapital.net.
Justin Recla:
Fantastic. Folks, stay tuned. We’ll be right back.
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