Need Advice: Funding Growth for Scaling a sucessful business

AhFreshMeat

AhFreshMeat

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Hey everyone,

I'm looking for some guidance and maybe you can help. We all know the drill: keep your equity close and bootstrap if you can. But, what if you're in a pinch?

A buddy of mine is in a tough spot with family medical bills piling up. He’s not keen on selling his blog and YouTube business, which is doing pretty well, bringing in low five figures a month. He's thinking about getting an angel investor on board to buy a small piece of the pie. The goal? Get some cash to handle the bills and scale the business up to six figures a month.

So, here's where I need your brains:
  • Ever heard of someone boosting their content business with angel investment?
  • Got any tips on where to find these angels, aside from taking out a business loan?
  • Is this a rare beast or doable?
 
AhFreshMeat said:
He’s not keen on selling his blog and YouTube business, which is doing pretty well, bringing in low five figures a month. He's thinking about getting an angel investor on board to buy a small piece of the pie.
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Just tell him to be super super careful. I don't have the link handy but I remember watching some videos on YT a year or so ago about some sharks circling and taking in a whole bunch of creators with exploitative contracts and then never paying them what was owed. I know we all make worse decisions when under family/financial pressure so just look out for him if he does get some offers on the table and make sure he doesn't regret it later.
 
AhFreshMeat said:
Ever heard of someone boosting their content business with angel investment?
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I've seen this happen a few times. But, the way I've seen it play out is a bit different than what you've described, usually one of the following two scenarios:

Scenario 1: A "strategic" investor takes a percentage of the business based on milestones and doesn't contribute any (or very little) cash and instead contributes the systems, support teams, or specific areas of expertise that have successfully scaled similar-sized creators to the desired outcomes before.

Scenario 2: An investor would contribute cash but the total amount invested would be earmarked for growth and the creator would not be able to "cash out" any portion of the investment. Instead, they would theoretically benefit once the business scales based on their equity stake in the "business".

It sounds like your friend is looking to liquidate a portion of the business while also attracting investment to scale. In my experience, those two objectives don't typically go hand-in-hand. I've seen it happen, but usually in businesses with high recurring revenue where the "investor" is essentially buying part of the cash flow.

Maybe if you share a bit more about the creator (e.g. niche, current monetization channels, target audience, etc.) we'll be able to share more ideas.
 
To find angels, you can just go on LinkedIn and type "angel investor" and set the city to your next big city.

As for dealing with investors, you gotta view it as creating a financial product. You have your first product, which is content. Then your second is a financial product for investors. TBH buying a company to help the owner out with medical bill is not a good financial product, unfortunately. Sounds like a great way to lose the capital. You also need to get over the hurdles of "this doesn't scale" and "you're reliant on Google" and "you have no differentiation and barrior to entry" if you have a content business.

Sounds like the only person who'd invest here, would be someone to exploit the situation. Not good.
 
You don't get an angel investor cuz a medical system has decided to put the usury screws to you.
You get a bankruptcy lawyer and you tell them to fuck off while protecting yourself as best as possible.
 
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secretagentdad said:
You don't get an angel investor cuz a medical system has decided to put the usury screws to you.
You get a bankruptcy lawyer and you tell them to fuck off while protecting yourself as best as possible.
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This is probably one of the best posts on BuSo ever. Sometimes just thinking properly outside the box/what the real solution is to a problem is makes more sense than solving some other problem...
 
@AhFreshMeat, I agree with @secretagentdad BUT it depends on how much money we're talking about... it's not clear if your friend is at risk of losing everything or if he is just feeling a short-term pinch from all of the medical bills.

If he's in bankruptcy territory, @secretagentdad might be guiding you down the right path...

If he's just feeling a short-term pinch then maybe he should be looking for alternative "quick" cash grabs from the channel/blog.

Depending on how he is already monetizing he could probably swing some undervalued advertising spots, affiliate/referral deals, or brand partnerships for his youtube channel and bring in some fast money.

I'm sure he's already explored all of this since he has a blog/channel bringing in five figures... but I just thought I'd share in case he's blinded by the stress and isn't thinking clearly about the opportunities that might be right in front of him without selling part of his biz.
 
He said the bills are piling up. I'm assuming he's in the usa or some similarly inspired dystopian system.

You don't sell off your assets or desperately raise money for your business that's already making a solid full time wage for you because somebody charged you American mark up on medical services.
You fight them. This is the most insufferable part of living in clown world.

You work out a payment plan and you threaten to not pay if they don't cut the crap. A medical billing advisor or lawyer is the right path. There is absolutely nothing to talk about before you do that. All hospital systems will negotiate because that's just how the system works now. They will sit their and take everything you will let them get away with.

It is very likely said advisor will tell him to look at minimizing income to qualify for not getting screwed under what ever programs this provider offers. OP doesn't need tips on how to put his buddy into bondage. He needs to escape the assholes before he thinks about investing in the business.

*Since we're on the topic and I'm preaching. Here's another thing most people should absolutely never EVER do. Do not put a major medical bill on a credit card.
It turns it into a not eligible for negotiation for anything, high interest fuck you. And, it shows up on your credit report as not a medical collection which is way more harmful.
 
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@secretagentdad preaching gold. It's disgusting that people have to deal with this shit. I escaped long ago... BBBB... iykyk. Hope this guy can get his situation sorted with the right guidance from an advisor or a lawyer.
 
Strange, while its cool to hear moderately off-topic answers that are backed by concern, emotion, and empathy. Im confused here because medical bills and bankruptcy was not the focus.

Thank you, but lets refocus...the questions were:

"So, here's where I need your brains:
  • Ever heard of someone boosting their content business with angel investment?
  • Got any tips on where to find these angels, aside from taking out a business loan?
  • Is this a rare beast or doable?"
 
AhFreshMeat said:
business loan
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If the business is profitable then getting a bank loan is extremely simple. Banks and funding companies will fall over themselves trying to get money into your hands if you've got revenue.

So why avoid that route?
 
As I shared above, I don't think this scenario is a good fit for angel investors... especially if he's trying to take cash out of the company in the short term.

But, I agree with @CCarter that bank loans are a realistic option to access capital if he's already profitable and he has a realistic plan to scale the business.

If he does go the bank route, tell him to shop around and pit banks against one another. They'll compete. Also, don't sleep on credit unions (or building societies in the UK) as they can sometimes come to the table with really attractive offers for local businesses.

Depending on his niche/business and where he's located, he could also tap a few government grant programs. They can be a pain in the ass in terms of reporting but it's basically free money and you just need to dance around some red tape.

If you share some information on the niche, country, growth plans, etc., you'll probably get more targeted feedback.
 
You also need to be picky when choosing an angel. Adding someone to the cap table is putting someone as a partner in the company. If that person has a shady reputation, that might scare other investors off. The investor might also push you into doing shit that's only for short-term profits at the detriment of long-term value. You gotta do your due diligence on investors too.

The good news is that, if he has positive cash flow, the VC community is looking for small-medium businesses like that to scale. They're done with hypothetical ideas that are moon shots to becoming a unicorn. That wave died in 2020-2023. Now they want sales, a proven business model, and traction.

As for knowing someone who scaled a content business with funding, I know one. They created a better help affiliate site with VC funding. Raised $400,000. Got MDs and PsyDs to write the articles. They're doing great now, which is like 4 years later.
 
What you are asking about is rare, angle/seed investment into a small solo content business. There is no reasonable upside or exit for the risk an investor is taking on.

The exception would be if the person has a track record or is someone of considerable note.

His best bet outside of business loans is gonna be GoFundMe probably.
 
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