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Venture Capital – LGBT Entrepreneur Startup Funding Resources

Gay, lesbian, bisexual, transgender and queer entrepreneurs often struggle well beyond their heterosexual start-up counterparts in many areas of business. One, in particular, is raising funding in the form of venture capital and operational working capital funding to launch and grow their business. Most businesses will need to apply for some sort of working capital during their lifetime. Traditional loans are not always an option to many LGBT business owners due to the lengthy paperwork required and strict rules and guidelines, and discrimination from the staff of traditional VCs/Banks/Leading Companies/Financial Institutions who have historically favored heterosexual white males. Progress towards diversity in entrepreneur funding is happening, yet continues to be slow.

Several financial companies and organizations have stepped up to aid LGBT entrepreneurs in acquiring the capital they need to see their vision to reality and continue its growth trajectory.

We’d like to consider this an active and growing list. If you are aware of a company or organization that providing funding and capital targeting the LGBT entrepreneur, we’d appreciate you using the Contact Us form and provide a link to their primary website so that we may review their info and potentially add them the resource list below.

If you contact any of the below, we’d greatly appreciate it if you would let them that you learned about them here on OutBüro.

LGBT Venture Capital Funding

1. Diversity Fund

Note: this site does not have SSL active, yet still live.

Diversity Fund - LGBT Employees Rate Employer Review Company Employee Branding OutBuro - Corporate Workplace Equality Gay Lesbian Queer Diversity Inclusion

We’re out to change the world of business finance!  Founded by LGBT with a focus on LGBT and other minorities.
Diversity Fund is a new business finance platform that unites rewards, lending, and equity finance provides sophisticated tools for investors to evaluate each deal and company and is fun and engaging for everyone!

Through Diversity Fund, an entirely new generation of entrepreneurs can finance their venture or expansion by immediately reaching thousands of potential investors who support their goals. Diversity Fund opens the world of business finance to entirely new sets of entrepreneurs and investors and leverages crowdfunding to even the playing field to the rest of us. Founded in Austin, Texas, Diversity Fund seeks to become a leader of small business finance and a trusted source for both entrepreneurs and investors. We’re excited about Diversity Fund and hope you are too. Be sure to register, so that we can send you information and news. Also, subscribe to our e-newsletter and check out our social links for more!

Backstage Capital - LGBT Entrepreneur Venture Capital Startup Funding Gay Business Owner Resources

2. Backstage Capital

Less than 10% of all venture capital deals go to women, People of Color, and LGBT founders. Other VCs see this as a pipeline problem. We see it as the biggest opportunity in investment.

Backstage Capital has invested more than $4M+ in over 80 companies led by underrepresented founders.  Backstage Capital is backed by Anthemis Group who at its foundation is dedicated to diversity.

LGBT Capital - LGBT Venture Capital Business Funding Gay Startup Lesbian Owner Financial Resources

3. LGBT CAPITAL

LGBT Capital was established in 2010 with a focus on the LGBT Consumer segment as a credible investment sector and to demonstrate the business case for advancements in LGBT equality and inclusion.

Since then and to support these aims, LGBT Capital has pioneered the development of an LGBT Diversity Investment Index with a complementary Institutional Investment methodology, developed Statistics and Research to demonstrate the potential of the LGBT Consumer Sector, and launched the first international specialist LGBT Wealth Management offering as well as an LGBT focussed Property Portal. LGBT Capital also works with a number of quality LGBT focused businesses to support their investment plans and growth.

LGBT Capital’s portfolio is guided by a primary focus on a sound business opportunity while actively supporting the advancement of LGBT Equality and Rights globally We prefer to work closely with clients and partners towards achievable goals. We will advise, but prefer to help structure, implement and execute. We believe in the power of Impact Investing and in particular that Impact Investing can support the progression of LGBT freedoms and inclusion globally. We also believe that the growth of quality LGBT businesses, particularly in developing markets, will play a key part in further developing LGBT freedoms and quality of life.

Google Ventures - LGBT Venture Capital Gay Business Funding Resources Lesbian Entrepreneur Startup Community OutBuro

4. GV

Formerly known as Google Ventures, GV was launched in 2009 to serve as the venture capital arm of Alphabet, Inc. Since then, it’s invested in over 300 startups within the life science, healthcare, artificial intelligence, robotics, transportation, cybersecurity, and agriculture industries. Some of these startups include Walker and Company, Tala, and Vida.

Google Ventures is very open to exploring relationships of entrepreneurs of all backgrounds.

We believe in the power of spending time together face to face. Whether we’re hosting a summer BBQ, celebrating Pride, or playing softball, you’ll find us with our portfolio founders and their teams.

Startup52 LGBT Venture Capital Gay Business Owner Funding Resources Lesbian Professional Community OutBuro

5. Startup52

Startup52X is focused on grooming extraordinary startup founders to launch highly successful and profitable ventures. We especially like teams that have at least ONE founder from underrepresented communities in tech. These include people of color, women, entrepreneurs who are – veterans, with disabilities, immigrants, LGBTQ, etc. We hope to increase diversity in startup and tech spaces while launching outstanding ventures.

Startup52 is an early-stage accelerator based in New York City. As the first sole diversity-focused accelerator in NYC, Startup52 was founded by Chike Ukaegbu to identify and groom outstanding entrepreneurs, especially those from untapped and under-tapped communities. Our main goal is to increase diversity in startup and tech spaces.

We run two cohorts a year with up to 15 outstanding ventures per class. Startup52’s ecosystem of partners, mentors, advisers, industry experts, investors and more, helps our ventures and founders thrive well even under the daunting challenges of startup entrepreneurship.

Our program follows an intensive structure that implements strategy aimed at uniquely helping startups develop an effective framework for decision making in focusing, aligning, executing and delivering against strategic adaptive and growth initiatives. This, we hope will lead to launch, longevity, and successful exits.

Our community of mentors, advisers, experts, serial entrepreneurs and  more, are successful people, who have sold businesses, held executive positions at large companies, have advanced degrees from ivy league schools, are current entrepreneurs, among other great accomplishments.

AngelList - LGBT Venture Capital Business Funding Gay Startup Lesbian Owner Financial Resources

6. Angel List – LGBT Market

AngelList is a U.S. website for startups, angel investors, and job-seekers looking to work at startups. Created in 2010, the platform has a mission to democratize the investment process and to help startups with their challenges in fundraising and talent. It started as an online introduction board for tech startups that needed seed funding. Since 2015, the site allows startups to raise money from angel investors free of charge.

The LGBT Market on AngelList is a resource to consider.  Companies listed include HER and HORNET along around 150 other LGBT entrepreneur-owned businesses and worth investigating as a potential venue for exposure to angel investors

7. Connectivity Capital Partners

Connectivity Capital Partners is a venture capital firm that funds early-stage startups. Through the efforts of its Chief Investment Officer, Denmark West, the firm advocates for diversity in technology by supporting extraordinary startup founders regardless of their background.

Republic - LGBT Venture Capital Business Funding LGBTQ Entrepreneur Gay Startup Lesbian Owner Financial Resources

8. Republic – LGBT Startups

As an LGBT entrepreneur, you are a champion of your brand.  With Republic you can create a crowdfunding campaign that does more than attract small investors – it aids in creating brand ambassadors.  Not LGBT specific as a platform, yet via your network and the compounded social influence that has you can spread your fundraising efforts to the audience of your making coupled with an active investor pool of 350,000 current members.   In May 2016, the U.S. Securities and Exchange Commission enacted Title III of the JOBS Act, allowing non-accredited investors — the majority of the US population — to invest in startups. But the complicated legal requirements demanded a founder and investor-friendly, easy to use platform to make startup investing truly accessible while adhering to legal requirements so that it is an ethical safe space to invest from within.

That’s why we built Republic: to democratize investing and level out the fundraising landscape for founders and investors alike. We’re SEC-registered, FINRA-licensed, and if you’re at all interested in startups, you’ve heard of our past work: Republic is part of a family of startup platforms together with AngelList, Product Hunt, and CoinList — one of the most trusted online startup ecosystems in the world.

Gaingels - LGBT Venture Capital Business Funding LGBTQ Entrepreneur Gay Startup Lesbian Owner Financial Resources

9. Gaingels

Gaingels is a profit-focused, mission-based affinity organization (a networking group of investors) which offers venture-stage investment opportunities into companies worldwide that have at least one LGBT founder, senior C-level executive, or board member.

Our members put great effort into assisting the companies we invest in. In turn, exceptional founders seek out this type of assistance to produce strong returns.

We also invest directly in venture funds, accelerator partners, and charity partnerships, including our own scholarship and mentoring program.

Intel Capital Diversity Fund - LGBT Venture Capital Business Funding LGBTQ Entrepreneur Gay Startup Lesbian Owner Financial Resources

10. Intel Capital – Diversity Fund

Announcing the Diversity Initiative, the largest venture capital resource ever created to focus on underrepresented entrepreneurs. This $125M commitment, part of Intel’s groundbreaking diversity efforts, will ensure that funded entrepreneurs enjoy the access to business development programs, global network, technology expertise and brand capital their talents deserve.  Focusing on both the seed-stage and expansion phases, Intel Capital – Diversity Fund invests in technology, environmental or social mission driving startups, and must be within the U.S.

Background:

In June 2015, Intel Capital announced the venture industry’s largest-ever commitment to invest in technology companies led by women and underrepresented minorities (African Americans, Hispanics, and Native Americans).

Initially envisioned as a five-year, $125 million fund, the Intel Capital Diversity Initiative was expanded in October 2016 to also invest in startups led by entrepreneurs living with disabilities, U.S.-based entrepreneurs from the LGBTQ community, and U.S. military veterans.

In May 2018, Intel Capital announced that the Diversity initiative had exceeded its initial $125 million investment target more than two years ahead of schedule. Through September 2019, we have invested $381M in companies led by diverse teams; such companies make up 15 percent of our active portfolio.

500 Startups - LGBT Venture Capital Business Funding LGBTQ Entrepreneur Gay Startup Lesbian Owner Financial Resources

11. 500 Startups – LGBTQ SYNDICATE

500’s mission is to discover and back the world’s most talented entrepreneurs, help them create successful companies at scale, and build thriving global ecosystems.

We believe that great founders come in all shades, genders, and nationalities.

Since our inception, we’ve made it our mission to find and empower talented founders, whether they’re across the world or overlooked in our own backyard.

Diversity has always been a core value at 500. We’re committed to being champions of the global VC community, not as it is, but as we’d like to see it.

At 500, we don’t just slap a poster on the wall about diversity – we know that LGBT founders, mentors, and investors are a huge part of what makes our #500Strong family so great. In 2014, we even launched Rainbow Round to highlight great entrepreneurs and do more community outreach.

Pipeline Angels - LGBT Venture Capital Entrepreneur Startup LGBTQ Business Funding Resources Gay Owner Lesbian Professional Community OutBuro

12. Pipeline Angels Funding

If you have a socially responsible business model, Pipeline is a great start. Business owners can pitch to a network of women investors through pitch summits which happen several times throughout the year in various locations. To be eligible, businesses must be for-profit, headed by a cis female, non-binary femme or transgender woman.  Our members serve as the friends and family for entrepreneurs who may not already have support at their critical startup stage.

13. DigitalUndevided

DigitalUndevided - LGBT Venture Capital Business Funding LGBTQ Entrepreneur Gay Startup Lesbian Owner Financial Resources

DigitalUndivided understands that cultural, structural, and financial barriers have functioned to restrict the involvement of people of color in economic chances. But, black and Latina women are the fastest-growing set of entrepreneurs in the USA. BIG is more than an incubator- it’s a direct pathway into the innovation economy for women of color. The BIG process begins with START, an invite-only weekend of ideation, pitching, feedback, and networking. From this weekend, we chose the cohort of the BIG Incubator

14. Brooklyn Bridge Ventures

Brooklyn Bridge Ventures - LGBT Venture Capital Business Funding LGBTQ Entrepreneurs Gay Startup Lesbian Owner Financial Resources

Self admittedly, this is an investment portfolio that happens to take on minorities, not as a mission, but as a matter of good business as discussed in his short article here >> How to build a successful and diverse venture capital portfolio without really trying   Brooklyn Bridge Ventures manages $23 million across two funds, leading or co-leading investments of around $350,000 in New York City companies that have yet to raise $750,000 in prior rounds.  BBV is the first venture capital fund based in Brooklyn, NY and it is managed by Charlie O’Donnell.  Conversations often start pre-product and pre-deck.  The fund invests in a wide variety of sectors, so say hello.

Kapor Capital - LGBT Venture Capital Business Funding LGBTQ Entrepreneur Gay Startup Lesbian Owner Financial Resources

15. Kapor Capital

Kapor Capital invests in tech-driven seed stage companies committed to closing gaps of access, opportunity or outcome for low-income communities and/or minority underrepresented communities in the United States.  We are open to investing in every sector, including education, work, finance, justice, food, and health.

We have invested exclusively in companies that have real potential to produce both significant financial returns and large-scale social impact by:

  1. closing gaps of access to information or goods and services; and/or
  2. expanding economic opportunity in the workplace and the marketplace; and/or
  3. increasing outcomes such as efficiency and competitiveness of market-based solutions to social and economic issues.

We seek entrepreneurs from all backgrounds, especially people of color, women and other groups that have been historically underrepresented.  We believe lived experience helps entrepreneurs identify rapidly-scalable, market-based solutions others have overlooked.

Aspen Capital Fund - LGBT Venture Capital Business Funding LGBTQ Entrepreneur Gay Startup Lesbian Owner Financial Resources

16. Aspen Capital Fund

They construct Hispanic and Minority company success stories by giving experience for early-stage companies. They supply mentorship, strategic guidance, and technical assistance. They focus particularly on first-time entrepreneurs and first-time small business owners.

Astia Angels - LGBT Venture Capital Business Funding LGBTQ Entrepreneur Startup Gay Lesbian Professional Community OutBuro

17. Astia Angels

Astia was founded in Silicon Valley in 1999 as a non-profit organization dedicated to identifying and promoting best-in-class, high-growth ventures that include women leaders.

Astia levels the investment playing field by cultivating a trusted global ecosystem of engaged male and female investors and advisors, who offer crucial resources, including capital, networks, and expertise. Unlike most VC’s, investment firms, or accelerators, Astia provides a creative, proven approach that contributes to the success of women leaders and their ventures.

Collaborative Fund Partner - LGBT Venture Capital Business Funding LGBTQ Entrepreneurs Gay Startup Lesbian Owner Financial Resources

18. Collaborative Fund Partners

Collaborative Fund Partners, LLC, is a social impact and inclusion investment firm. CFP exists to “do well by doing good.” Through a multi-company investment approach, CFP is able to minimize placement risk, where most early-stage funds have failed in the past. By becoming directly involved in each company, CFP is able to maintain a quality control position with the management team and the use of funds needed to take each company into revenue and profitability.

Collaborative Fund Partners, LLC generates capital appreciation through investments in its portfolio companies that meet the Fund’s investment policies. The Fund will seek to fulfill its primary investment objective by making investments in early-stage companies that require additional equity and/or working capital in order to establish or expand their businesses

19. NewME

NewME Diversity Fund - LGBT Venture Capital Business Funding LGBTQ Entrepreneur Gay Startup Lesbian Owner Finance Resources

Founded in 2011 by Angela Benton, NewME has accelerated hundreds of entrepreneurs through our online platform, residential “boot-camp” accelerators, and equity portfolio. We pioneered diversity in Silicon Valley by focusing on helping entrepreneurs identify strengths from their non-traditional backgrounds and leveraging them in business. We’ve helped hundreds of entrepreneurs build better businesses some have even went on to raise venture capital funding. To-date NewME has helped minority entrepreneurs raise over $43MM in funding.

20. Diversecity Ventures

Diversecity Venture Capital LGBTQ Entrepreneur Startup Gay Business Owner Lesbian Founder Professional Community OutBuro

Mariah Lichtenstern’s background of building bridges between the privilege with those that are not prompted her to found Diversecity Ventures. Its focus is to invest in startups that not only aims to make a socio-economic and environmental impact but, more importantly, those that strive to promote cultural, geographic and cultural diversity.

Reach Capital Diversity Venture Capital Investing Eduction Focus LGBTQ Entrepreneur Gay Lesbian Business funding Resource Professional Community OutBuro

21. Reach Capital

Co-founded by Shauntel Poulson, Reach Capital is a venture capital firm that aims to support minority-led startups striving to help underserved communities in the country, particularly in the field of education. We invest in education because we believe itʼs our most valuable resource. It has the power to influence our course, contribute to our dreams and strengthen our communities. We invest in the people we believe in and the ideas we want to help build. Whether we are your sole investor or one of the many partners along your journey, we’ll always be there, ready to go to bat for you when necessary.

22. Black Angel Tech Fund

Black Angel Tech Fund was started by a group of successful Black entrepreneurs and angel investors after a thought-provoking panel about the lack of Black startup founders during the 2015 Stanford Black Alumni Summit. Since then, they have taken up the cause to use financial resources from successful African-Americans to support Black-owned startups. If you are LGBTQ and also happen to be African American, this VC may have interest in you.

Digitalundivided LGBT Venture Capital Busisness Funding Resources LGBTQ Entrepreneur Startup Finance Gay Lesbian Professional community OutBuro

23. Digitalundivided

Digitalundivided was founded by Kathryn Finney in 2012. Its mission is to champion Black- and Latinx-owned startups, by providing financial support and sound advice that will not only help launch these startups but also scale. If you are LGBTQ and also happen to be African American or Latinx, this VC may have interest in you.

DID continues to expand it’s impact and create true systems change through initiatives like The Doonie Fund, which has made over 1000 micro-investments in black women entrepreneurs and the expanded START program, which serves as an entry way for Black and Latinx women entrepreneurs into high growth entrepreneurship.

Project Diane 2020 is set to be released in Fall 2020 and while financial impact remains a central focus, 2020 data will spotlight community impact and what it truly means to be “self-made” in the tech and innovation space.

24. KEC Ventures

Based in New York City, KEC Ventures was founded by entrepreneurs from different ethnic backgrounds and industries. This unique blend of leadership gives KEC Ventures the ability to discover and support early-stage startups founded by entrepreneurs belonging to minority groups.

MaC Venture Capital LGBT Entrepreneur Startup Finance Business Finance Lesbian Gay LGBTQ Professional Community OutBuro

25. MaC Venture Capital

We help entrepreneurs bring the future into focus to find their breakthrough moment. Our proven track record of 100+ investments has unlocked growth opportunities through capital, advisement, and relationship building. We are the result of the merger between successful Los Angeles and Bay Area based Seed funds, Cross Culture Ventures and M Ventures. We invest in technology companies that create infectious products that benefit from shifts in cultural trends and behaviors in an increasingly diverse global marketplace.

Harlem Capital Partners LGBT Venture Capital Startup Funding LGBTQ Entrepreneur Business Owner Finance Resource Gay lesbian African American Black Professional Community OutBuro

26. Harlem Capital Partners

Based in New York, Harlem Capital Partners (HCP) is a venture capital firm that focuses on early-stage, minority-owned startups. Its mission is to invest in 1,000 of these types of startups within the next 20 years, with half of these being women- and minority-owned startups. HCP focuses its investments towards startups that aim to enhance financial, marketing, and operational experiences. As a solution to this challenge, HCP partners with entrepreneurs who have revenue-generating tech-enabled products or services that can leverage our financial, marketing and operational experiences to implement key processes to go from selling products to running a sustainable business.  

Dreamit - LGBT Venture Capital LGBTQ Entrepreneur Startup Funding Angle Investor Gay Business Owner Investing Finance Lesbian Professional Community OutBuro

27. Dreamit Ventures

Dreamit Ventures prides itself not only one of America’s top startup accelerators but also a catalyst of diversifying startup ownership in the country, particularly those that focus on developing Health and Urban Tech solutions.

Its partnership with Comcast Ventures aims to provide financial support and mentorship to minority-owned startups with ready-made products to help them scale through their Dreamit Access program.

28. Humble Ventures

Humble - LGBT Venture Capital Funding Resources LGBTQ Entrepreneur Startup Gay Business Owner Finance Lesbian Professional Community OutBuro

Since it was founded, Humble Ventures has invested in 47 different startups, 70% of which are those established by women and entrepreneurs belonging to minority groups. These theCut, The Mentor Method, and KweliTV. Humble Ventures’ goal is to bring to innovative startups collective human, financial, and technical resources for them to launch and scale.

We focus on diverse entrepreneurs that are solving problems for the fastest growing demographic segments. We believe that diverse entrepreneurs provide opportunities for disproportionate returns and represent the markets of the future. We know that diverse audiences are tied inextricably to the future of cities. These audiences require responsive healthcare, access to wholesome food, economic stability, education, safe neighborhoods, and tight social support to create an environments for them to thrive.

29. Founders First Capital Partners

Founders First Capital Partners - LGBT Venture Capital Funding Resources LGBTQ Entrepreneur Startup Gay Business Owner Finance Lesbian Professional Community OutBuro

Founders First Capital Partners is a venture capital firm founded by Kim Folsom with the goal of providing capital and support to startups owned by women, entrepreneurs from minority groups, and military veterans.

We fund service-based companies generating between $250K and $5M in annual revenues typically led by minority, military veterans, or woman founders. We offer Revenue-based investment (“RBI”), a new form of business financing, distinct from the preferred equity structure most VCs use and more flexible than traditional bank debt.

Its goal is to help startup founders not just launch a successful business, but also one that can be carried from one generation to another.

Valmo Ventures - OutBuro LGBT Entrepreneur Startup Angel Investor Venture Seed Capital Investing Funding Gay Professional Network Community GLBT Lesbian Bisexsual Queer

30. Valmo Ventures

Valmo Ventures is a venture capital firm founded by Valerie Mosley, a successful entrepreneur who’s made it her mission to help under-represented startup founders grow both their self-worth and net worth.

In line with this, Valmo Ventures’ mission is to create, advise, and partner with startups to transform them into valuable and profitable assets to society as a whole. Valmo Ventures creates, collaborates, and invests in companies, assets, and efforts that add value to portfolio returns and add value to our society. We believe that when we advise, invest in, and collaborate with bright, like-minded, and like-hearted individuals, extraordinary results are possible.

31. Base Ventures

While Base Ventures is still a relatively young venture capital firm, it’s already making a mark as far as bridging the gender, and ethnic gap observed among startups in the country. Already, it has raised multi-million dollar funding for startups like StyleSeat and Balanced Payments.

Much of the success of Base Ventures is owed to its founder and Managing Director, Erik Moore. A seed investor of Zappos.com, Moore is recognized as one of the top 25 Most Influential Black in Tech and is driven by his desire to change the world by investing in young entrepreneurs.

32. Precursor Ventures

Precursor Venture Capital - LGBT Venture Capital Seed Funding Angel Investor Gay Business Owner Resources Lesbian Entrepreneur Startup Finances Community OutBuro

Precursor Ventures is a venture capital firm that provides funding to pre-seed startups developing B2B and B2C software applications and services, and connected hardware. Although it’s one of the lesser-known firms, Precursor Ventures has willingly taken on the mission to ensure startup founder from diverse backgrounds are given equal opportunity to receive funding to grow and scale their businesses.

PHILOSOPHY

Precursor Ventures was founded with one simple premise. It is our belief that all entrepreneurs, regardless of background, benefit from having an institutional investor to help them scale and grow their company from the very beginning. We have built the entire firm around this premise that helping entrepreneurs get started and scale will be our life’s work. To that end, we have six core principles that drive our decisions and strategy:

We want to invest in your first institutional round of investment. We do not have requirements for traction or metrics. We want to be part of the company as early as possible. We are unafraid to back unproven, first-time entrepreneurs; unproven is not the same as incapable. We believe that the greatest returns in venture come from entrepreneurs who are capable but have not yet had the opportunity to show the world their talents and capabilities. We aggressively back entrepreneurs who have something to prove. We hold ourselves to high standards in terms of the diversity of founders we back and support. We are committed to investing in founders who represent a wide variety of backgrounds in terms of gender, race, background, academic experience and life circumstances. We are patient because building meaningful companies takes time and the rewards are great for those who participate in the entire journey. Building great companies takes time. There are no shortcuts and we know that the journey will be long but the rewards are worthwhile. We focus on long-term thinking. We value intellectual curiosity and open thinking. The best companies are built by curious founders who question everything and are open to thinking about new ways to tackle problems. We invest in early-stage companies in the San Francisco Bay Area, New York, and Toronto. We are willing to consider other geographies, but we focus our energy in these locations.

No Equity Lending and Cash Flow Funding

33. Excel Capital ManagementExcel Capital - OutBuro LGBT Entrepreneur Startup Angel Investor Venture Seed Capital Investing Funding Gay Professional Network Community GLBT Lesbian Bisexsual Queer

Excel Capital Management is a proud supporter of the LGBT community, and we are here to help with all of your business funding needs! For more information on Excel and the funding solutions we offer, check out our Solutions page and APPLY NOW! For even faster service, contact one of our funding specialists TODAY at 877-880-8086

34. Wells FargoWells Fargo - OutBuro LGBT Employer Reviews Rating Diveristy Recruiting Jobs Company Sexual Orientation Policy Gay Professional Network Employee Advocacy Lesbian Queer Bisexual

Wells Fargo a national leading small business lender for eleven years and they are dedicated to supporting the business needs of the LGBT entrepreneur client community. This dedication includes being a founding corporate partner of National Gay and Lesbian Chamber of Commerce (NGLCC) and strong support for LGBT inclusion with their LGBT clients and their employees. As an employer, Wells Fargo fosters a culture in which all people and their individual differences are not only accepted but celebrated.  If you’re an LGBTQ+ employee of Wells Fargo rate them here.

Final thoughts

Being an entrepreneur is never easy.  But so worth it.  You can make inroads to attaining your entrepreneurial goals.  Be smart about who you partner with for funding.  It will be a long-lasting relationship not to be taken lightly.

Bear in mind there is not any failure, only feedback. Remember that there are organizations and persons which are pushing for diversity and that encourage LGBTQ and other diversity entrepreneurs.  One such organization is the National Venture Capital Association who has listed over 40 venture funds dedicated to diversity.  We are still reviewing all those companies to validate they are worthy of including in this list in a future update.

Catch Me If I Fall… Gay Life in the Third Age

Catch Me If I Fall… Gay Life in the Third Age

Fifteen years of marriage have brought us happiness and contentment in our personal lives. After both working in the gay scene for 30 years (and therefore having no prospect of getting a pension) we decided it was time to leave the urban gay scene, move to the countryside and start a new life, more suited to our needs as we grew older. We slowly built up a new circle of friends and neighbours and started a new business selling antiques, growing herbs and giving workshops.

www.hogelandshoeve.be

Then, after 20 years of building a small but steady farm business in Holland, our landlord suddenly wanted us out! We were confronted with the choice of either downsizing or taking on a new challenge. We chose the latter and decided to move to Belgium where we could hope to rebuild a bigger and better business and support our modest lifestyle. Although it meant giving up all our savings, we were determined to build a new life in which we could continue to work into ‘old age’, and confident that we were strong enough to succeed.

Our Dutch friends told us how ‘brave’ we were! Our gay friends told us how ‘lucky’ we were! Our new neighbors told us how happy they were to welcome us to Belgium. And we kept in touch with everyone with regular newsletters and updates to our website.

After we landed, the paperwork took most of a year to organize. We scratched our way through immigration, health insurance, car registration, residency permits, work permits, and myriad other forms until we eventually felt that we were beginning to settle. We opened our new farm-shop and found slots at local markets where we could start to sell our produce. We made friends with other local farmers. We started to grow our business again and get support from the local community.

But we had still overlooked the snakes in the grass. Our new business started to grow and we sold well in the summer months. Then we learned that the Belgian government wants not only the Sales Tax for the summer, but six months of Sales Tax in advance(!) and, with our savings already gone, we face a cash crisis. The income we can generate at this point will not pay for both the advance taxes and the investment we need in equipment and to build up our stock. Retailers and restaurants want to buy our products in the future, but we still have a big investment to find before we are ready to supply them.

We’ve decided to try crowd-funding now, hoping that our friends and community will possibly step in to save us from going over the cliff, but we have no idea whether it will work. Does a lifetime of being responsible citizens, good, caring friends, and generous in helping others really bring us any ‘social capital’? We’re biting the bullet now and will shortly know the answer.

Two-Gay-Men-Start-Organic-Farm-Sharing-their-Story-as-Entrepreneurs-Seeking-Investors-Capital-Funding

If we were straight folks then we would perhaps have a better chance. But our social circle has been decimated by HIV, leaving lots of them sick and living on benefits. Others have moved away  and are no longer as close as we would like. And since we are no longer shopping around for casual sex, we seem to have little direct contact with the majority of the LGBT community. Of course, there are many others in a similar situation; couples living in the country with a few cats, but we haven’t yet found a way to meet the older rural gay community with whom we can build a network.

The business keeps us both busy for 16 hours a day, up to our elbows in jam and manure, with little time to work on anything else. That’s not unexpected with a new business, but makes us feel isolated, fearful, and sometimes overwhelmed by events around us. It’s hard to stay focused when the whole project has become precarious.

We don’t regret our decisions, nor would we consider moving back to the city life as two older gay men with their youthful excesses long gone. However it’s still hard to see what ‘community’ we can develop beyond it.

We’d love to hear from others who recognise themselves in this story. Perhaps you can help us find the way forward or just want to offer us a web-hug? And finally, of course, perhaps YOU are in a position to help us with our crowd-funding campaign?  gf.me/u/v24yri

Hogelandshoeve BV
Sint Annastraat, 29
3730 Hoeselt
Belgium

How to Make Your [Gay] Money Work as Hard as You Do - LGBTQ Personal Finance Education Debt Reduction - OutBuro - bisexual queer lesbian transgender

How to Make Your [Gay] Money Work as Hard as You Do

Do you all too often have more month left over at the end of your money? Do you work hard for your paycheck only to watch it go out faster than it comes in? Do you ever wonder how you’ll put your children through school?

You’re not alone. The truth is that even though “gays are fabulous” (and we are), most of our community is struggling financially.

And we can relate.

Learn more about the Debt Free Guys’ LGBTQ Personal Financial Freedom course and resources.

Who are we?

We are John and David. After dating for 18 months, we came out of the closet to each other about our money, and it wasn’t pretty. We were $51,000 in credit card debt. Ouch! Sure, everything looked good on the outside. But we were hurting on the inside.

We were the gay cliché of being fabulous but fabulously broke. Ever feel this way?

You see, coming from times and places when it wasn’t okay to be gay, we were both bullied, picked and treated differently because we were – well – different. We grew up feeling like we weren’t as good as the other kids. Can you relate?

Then, when we found the courage to come out of the closet and moved away from our families to find other people like us, we were so insecure and wanted so desperately to fit in with the other gays, that we thought we needed all the right things – clothes, home, travel, careers, partners, stuff – all the right outward appearances – so we wouldn’t be bothered by another community. Our community. Sound familiar?

We paid off that credit card debt in less than three years! It took a lot of soul-searching, and we attribute that success to figuring out what was most important to us. Sixteen years later, today, we’re helping other queer people achieve the same financial security.

Are you living fabulously broke - Learn to be debt free with the DebtFreeGuy

Is queer money different than straight money?

If you thought you (and now us) were alone in this struggle, did you know that:

  • same-sex couples with at least one child under the age of 18 have 20% more credit card debt than their straight peers and have almost 90% more student loan debt?
  • queer college graduates have 16% more student loan debt than non-queer graduates?
  • 57% of our community says their current financial condition harms their mental health?

So, no, you’re not alone. Yes, our community has systematic and personal struggles with money. Yes, there’s something we can do about it but knowing there’s a problem isn’t enough.

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Personal Financial Training for LGBTQ Community

Debt Free Guys, David Auten and John Schneider III, have recently launched the first in a planned series of witty, informative and results-oriented online courses. Debt Free Guys focus their personal finance insight on the LGBTQ Community. Learn a little more about Debt Free Guys in a past article we wrote about them.

Where to start?

David and John felt that starting with How to Pay Off Credit Card Debt is something a vast majority of Americans deal with and know it’s a problem in the gay, lesbian, bisexul, transgender and queer community.

In the first course you are :

  • provided a QUEER MONEY view on finances
  • taught how to change financial behaviour
  • will complete it with an actionable plan
  • grow toward personal financial freedom

Take Action

Join David, John and your LGBTQ peers in creating peronsonal and community strenght through personal financial health.

>> Learn More & Enroll NOW <<

When you enroll, use the code DEBTFREE2019 for $100 off the already low course price.

Queer Money is a trade mark of Debt Free Guys

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LGBT Business Owner How Much Should You Pay Yourself?

You are an LGBT Entrepreneur and started your own business to do something you love and make money.

You rock.

      You are AWESOME.

                Likely little nuts like most risk-taking entrepreneurs, but we LOVE YA. 

But how much should you pay yourself? Too little and you may struggle to survive. Too much and your business might be at risk. So how do you strike the right balance?

Take the guesswork out of your salary

For many, the chance to set your own salary sounds like a dream come true. But small business owners know the reality is a little more complicated.

You should only pay yourself out of your profits – not your revenue. When you see money coming into your business, don’t assume you can pay yourself a big slice of that. Before you take your cut, you also need to take account of things like taxes, payroll, fixed costs and overheads.

Good accounting software will really help you work out how much you can afford to pay yourself. It will let you keep track of all expenses and calculate profit rather than revenue or turnover. It will also help identify areas you can make tax deductions.

Setting your own salary will depend on your location, your industry, your profits, and how much you want to earn. But there are a few things to think about that can help you land on a reasonable figure.

Don’t undervalue yourself

If your business is still in its startup phase, you might not turn a profit during your first year. Of course, this doesn’t mean you shouldn’t pay yourself.

There’s no point in being a complete miser with your company’s money if it causes you financial and emotional problems. Personal money issues are a big cause of stress, and if you’re stressed then you won’t make good business decisions.

Undervaluing your time and the work you’re doing can harm your productivity and your business, so you should pay yourself enough to live comfortably without worrying. Take out what you need to avoid causing problems for your business and your personal life.

Add yourself to the payroll and pay yourself regularly

Don’t just dip into your business funds as and when you need to. Set up payments for you and your employees (it may be weekly or monthly) in your payroll software, and stick to them.

Build that into your business plan right from the start, perhaps with a rising salary as your business grows. That way you’ll get used to the amount of money you receive and won’t have to worry about taking out occasional large lump sums.

This will also look better to your employees. Regular small payments will be more acceptable to them than random large lump-sum withdrawals from the business. They will also look more acceptable to the government, too. If you take out big sums of money at irregular times, it may raise eyebrows at the tax office or lead to an audit of your company.

Take out ‘reasonable compensation’

Depending on where you live in the world, ‘reasonable compensation’ or a similar term may apply to you. This is known as the amount of money that the government expects you to take from your business. It depends on the size of the business, the market sector, and the level of turnover and profit.

Here are some pointers for what’s a ‘reasonable’ amount:

  • How much would a similar business pay for the work you do in your role?
  • What do recruitment ads and agencies offer to pay for someone in your position?
  • Are your wages equal to your duties and are those duties being performed?
  • Do your wages seem reasonable when you take into account your level of responsibility and the amount of business you handle?
  • Is your pay directly related to the amount of time you spend working?
  • Does your pay seem reasonable when compared with your employees’ wages?

You can also talk to founders of other, similar businesses and try to find out roughly what they pay themselves. This is a good way to start networking, though you might have to be tactful about it. And take a look at your government’s tax websites for further guidelines.

Consider the legal structure of your business

How much you can pay yourself, and when, might be restricted by the legal structure of the business you run.

For example, if you’re a sole proprietor you’re usually free to pay yourself whatever and whenever you like. That’s partly because you’re not accountable to shareholders or stockholders.

But other types of business, like incorporated businesses, usually have the business owner on the payroll. They would receive wages on a regular basis, just like any other employee.

However, the rules do vary from country to country, so check with your accountant before you decide anything. Be sure to record all transactions in your accounting software so you have an audit trail too. Do this just in case the tax office decides to investigate your payments to yourself.

Be tax-efficient: Five pointers

Now you’ve decided how much is a fair salary for you, what’s the best way to withdraw that money from your business while remaining as tax efficient as possible?

There’s no one-size-fits-all approach because tax laws vary from one jurisdiction to another. Tax rates and allowances will also vary depending on how your business is legally structured. Here are some ideas to consider:

  1. Take a straight salary
    It’s simple, easy to manage and account for, and is unlikely to raise any eyebrows. It’s not always the most tax-efficient option, though.
  2. Balance salary with dividend payments
    If, as the business owner, you also own stock or shares in your company, you could take a minimal salary and then pay the remainder out of dividend payments. This can be more tax-efficient (since dividends are usually taxed less than the salary). Make sure you check the legality with your tax office first.
  3. Take payment in stock or stock options
    This can be a useful way of paying yourself in a tax-efficient manner.
  4. Take a combination of salary plus annual bonus
    This arrangement isn’t just the preserve of the banking industry and it can be tax efficient in certain circumstances.
  5. Create a business agreement to pay yourself later
    If you’re not desperate for money right now, you could create a written business agreement to pay yourself later, deferring payment to yourself. But this becomes a liability for the company and would need to be accounted for.

Don’t forget deductions, expenses, and benefits

Leaving aside wages, there are some great financial benefits to running your own business. Medical insurance and 401(k) contributions are just two types of benefits to consider. They can make a big difference to your personal financial situation and they’re legitimate business benefits.

Here are some examples of expenses that can be offset against the tax your company pays:

  • Car expenses (business mileage of your car)
  • Mortgage interest payments (if you work from your home)
  • Capital equipment expenditure (such as new computers).

You’re not usually allowed to claim expenses in the “personal, living or family expense” category. But you can claim for the business use portion of an item. This might mean you get to drive a new car in your personal life at a reduced overall cost. When in doubt, check with your accountant to find out what will work for you.

Invest money for growth

The money you take out of the company (that doesn’t relate to your business) is money that can’t be used for investment and business growth. You’re likely to be taxed on money you take out, so the real value of the money you keep in the company is even greater. That’s because it will be untaxed or offset against tax, depending on how it’s used.

If you think your business is going to grow in the future, it makes sense to use some of your profits to help fund that growth. The more money you invest sensibly into your business, the more likely it is that your company will grow. And that means you should be able to pay yourself more at a later date.

When not to pay yourself

If your business is going through a tough time financially, it’s usually not a good idea to take any money out of your business for personal use.

You should avoid taking any money if your employees haven’t been paid. It looks bad, and would seriously affect their morale if you did.

When you owe a lot of money it’s also wise to refrain from paying yourself a large amount. Creditors are unlikely to be impressed if you’re still taking home a large pay packet while their invoices or loans remain unpaid.

Pay yourself what you deserve

Ultimately the amount you pay yourself will depend on the success of your business. The more money your business brings in, the higher the salary you could reasonably be expected to draw from it.

It makes sense not to get carried away and pay yourself too much, for reasons described. But if your company is profitable, there’s no reason why you shouldn’t reward yourself for that success.

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How to Raise Money for Your LGBT Owned Business: Part II

So you’ve prepared yourself for the task of raising money in Part I of this guide – but now what? You’ll need to look at all the options to see which one suits your small business. So what are the best, most realistic ways to get funding?

Eight ways to raise funds

The traditional ways to raise money were through personal savings, bank loans, or retirement funds. But now there’s a much wider range of possible finance sources for your new business. So which type of funding is right for you?

1 Personal saving or retirement funds

If you have some savings you could use them to finance your business. The advantage here is you shouldn’t have to pay interest on the money and you won’t have an obligation to anyone else.

Using retirement funds is another option. It may be possible for you to draw down funds from your 401(k) to put into your business.

Regulations vary between countries, so you’ll need to consult a financial adviser to see what’s permitted. Be sure to check the tax implications of using personal savings or retirement funds for business purposes.

2 Bank loans and credit

Banks can be useful sources of funding, but the loans or credit they provide will usually have to be secured. That means you’ll have to offer something of value as collateral. This could be your house, or your company’s inventory or accounts receivable ledger.

If you fail to repay the loan, the bank may then take your collateral. That could mean you have to sell your house or stock or lose your income. So it’s not a transaction to enter into lightly.

Banks can offer the following funding services to help your company grow:

  • Loans
    These provide a specific amount of credit to purchase assets or meet financing needs. The loan is repaid based on a predetermined schedule or through monthly principal and interest payments. Interest rates are usually fixed for the life of the loan.
  • Lines of credit or business overdrafts
    These tend to be used for periodic financing. You can borrow up to your credit limit whenever needed.
  • Equipment financing
    Buying equipment can be a good option if you expect it to have a long, useful life. You may also benefit from financial advantages such as depreciation and tax deductions.
  • Real estate loans (mortgages)
    These are loans for purchasing land or commercial property.
  • Vehicle financing
    This is usually for buying or leasing commercial vehicles such as trucks or company cars.

The authority to lend to businesses has become centralized in some countries. This leaves branch bank managers with less power than they had in the past. But you’re still more likely to be given a loan if you have an existing account with the bank since they can easily check your past financial record.

3 Credit card loans

Loans from credit card companies are usually unsecured, which means you won’t lose your house if you fail to repay the loan (though you could still be declared bankrupt).

However, the lack of collateral is reflected in the price. Credit card loans can have a higher interest rate than other types of loans ­which are often much higher.

Ask yourself if your business can afford the interest rate being charged. If your company’s profit margin is forecast to be 10% and the credit card interest rate is 15%, the numbers might not add up.

4 Government grants and small business loans

Many governments offer grants and loans to small businesses, either directly or through publicly­ funded organizations such as small business associations.

The available funds and the terminology will vary depending on the country you’re in. Small business loans, micro­loans, and research grants are often available for different types of business.

Your first step should be to contact small business organizations near you since they will help administer government loans and grants. Talk to them and find out what financial assistance is available.

5 Venture capitalists and angel investors

Venture capitalist (VC) organizations became more prominent during the late 1990s dotcom boom, and the technology field is still one of their preferred areas of operation. VCs tend to favor high ­risk and high­ reward companies that have significant growth potential.

It’s a gamble for them, but the pay­offs can be significant. They usually demand significant equity in the company in return for funding, so be prepared to hand over a large percentage of ownership if you go down the VC route.

Angel investors are similar to VCs but they tend to work with companies that are at an earlier stage of development. The money comes from wealthy individuals, usually in exchange for convertible debt or ownership. A recent trend is for angel investors to participate in groups, working together on research, investment capital, and advice.

Venture capitalists and angel investors will want you to answer the following questions in detail:

  • How many customers do you have today and how do you plan to grow?
  • When and how will your business be profitable?
  • Who are the leaders in the company and what is their experience?

Don’t be surprised if any funding deal includes side­lining you as executive manager or director. The VC or angel investor may not think you have the skills and experience to grow the company and repay their investment. If this is the case, they could want to replace you with someone who does.

6 Crowdfunding

Crowdfunding means getting finance from a large pool of backers. Instead of asking just one or two people for money, you can ask thousands or even millions. People pledge money in return for perks and rewards when your project goes ahead, and usually, this is done online. Crucially, crowdfunding sites use an all­-or-nothing funding model – either the funding goal is reached, or the project gets nothing.

Before you look at this as an option, make sure you get expert legal advice about your country’s jurisdiction on crowdfunding.

If you are able to use crowdfunding, it offers an alternative to conventional funding, with less stringent credit checks, better-­informed investors, and often no need for collateral. And the funding process is often faster than it would be from a bank. This is a great option for some companies that will have struggled through the recession and have poor credit ratings as a result or others that are new and so have no credit record at all.

Crowdfunding can also provide useful feedback on your business plan. If you reach your funding goal, it’s a good indication that your plan has a realistic chance of success. If you don’t, you might need to rethink your plan.

Two of the most well­ known crowdfunding sites are Kickstarter and Indiegogo. The former is US ­focused while the latter is smaller but with more international support. If you want to use either of these crowdfunding sites, you’ll need to check that they’re available from your country.

For more about crowdfunding, here’s a list of 30 people you might want to follow.

7 Peer-­to-peer lenders

Similar to crowdfunding sites, peer­-to-peer­ (P2P) lenders match borrowers and lenders directly. This is usually done via online auctions and without going through a traditional financial institution like a bank.

The rates can therefore be more favorable to both sides. Borrowers tend to pay less than bank lending rates, while lenders get a higher (though more risky) return on their savings.

While crowdfunding provides finance for new businesses or specific projects, peer­-to-peer­ lending can be used for more general purposes.

It works a lot like eBay. You post the amount you need on a peer­-to-peer­ lending site, along with the maximum interest rate you’re willing to pay. Lenders can then choose how much to lend to you, and at what rate. Examples include Prosper in the US and Zopa in the UK.

Again, like crowdfunding, the jurisdiction in your country may prevent you from using P2P lending, so make sure you get legal advice before proceeding.

8 Friends and family

It can be tempting for you to borrow money from friends and family, but it can also go badly wrong. There’s a simple psychological reason for that. Relationships are based on emotions, while business is (or should be) based on rational decisions. The two rarely mix well.

If you have a strong relationship with the friend or family member from whom you plan to borrow from, this can be a low ­cost source of finance for your business. But it can create an emotional liability as well as a financial one. This is the case particularly if you borrow from people who don’t have much business experience.

If you do decide to borrow from friends or family, have a clearly ­written legal document explaining your agreement. That way, if there are any problems later on, at least you’ll both have something in writing to refer to.

Adapt to the current financial climate

Banks are cautious about lending to small businesses at the moment. One reason for this is because they’re rebuilding the capital they lost during the financial crisis. In addition to this, many of them don’t understand the business models of some newer companies. They also tend to be more focused on real­ estate lending, because the collateral is tangible and fixed.

But low-interest rates around the world mean that many cash-­rich organizations and individuals are chasing yield. If you can present a compelling business plan, you stand a good chance of getting funding from less conventional sources.

Do your research to get the best option

Crowdfunding, peer­-to-peer lending, government grants and loans, venture capitalists, angel investors, and more offer plenty of possibilities. In fact, the funding landscape is changing all the time. For example, companies such as Kabbage offer working capital advances based on real­-time business metrics.

Do your homework and use good quality accounting software to test out different financial scenarios, to see what funding your business really needs. Then compare the risks and benefits of the choice. Steer clear of disreputable lenders and make sure you understand the implications for your business. When you take your time and investigate all the funding options thoroughly, you’ll find one that’s right for your business.

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How to Raise Money for Your LGBT Owned Business: Part I

Starting a new business can be expensive, so it makes sense to seriously consider investment options right from the beginning. However, first you’ll need to be well prepared for the obligation that comes with getting funding, the questions to ask, and the small print to consider. So how can you prepare for this?

Challenges faced by small businesses starting out

Some businesses can be launched without much capital. For example, if you’re planning to provide remote services while working as a sole proprietor, you may need nothing more than a laptop and an internet connection.

But other types of businesses need money to get started. If you intend to launch a business that needs significant capital expenditure (such as a retail or manufacturing business or a company that employs several other people), you won’t get far without initial funding.

Seven questions to be ready to answer

Whoever lends you money will want to know you’re serious about investing it to grow your business. They will also want to know that you’ll be able to pay back the loan principal and the interest.

Make sure you have the answers to these important questions at your fingertips when talking to a potential investor:

  1. How much money do you want to raise?
  2. Will you be able to provide any collateral? What are your assets?
  3. Are you looking for debt, equity or other financing?
  4. How is your business credit rating? You can check this yourself in many countries.
  5. How is your personal credit rating? This too ­– and yes, the banks will check.
  6. How long have you been in business?
  7. What is your revenue?

Use professional accounting software to prepare charts and forecasts of your costs and revenue. This will help convince lenders that you have a solid business plan in place.

Always read the fine print

The terms and conditions of most loan agreements include the option for the lender to call in the loan at any time. That means the lender can ask for all their money back, with little or no notice, and regardless of whether you’ve been paying on time up to that point.

This doesn’t happen often, but when it does it can be devastating. Unfortunately it happens most often during recessions, when banks and other lenders become more nervous about the likelihood their loans won’t be repaid.

This is just one reason why you should read the fine print of any loan agreement carefully. Get legal advice if necessary, and work with your accountant or financial planner to determine how much you can safely borrow. Make sure you understand all the terms of the loan before you sign.

Understand the cost of investment

When raising money for your business, you’re unlikely to get something for nothing. Your investors will want something from you in return for risking their funds:

  • For bank or credit card loans
    The cost to you is the interest rate and the risk of losing any collateral you’ve put up.
  • For angel investors and venture capitalists
    The cost is usually a percentage of ownership or control of your company.
  • For crowdsourced funds
    It’s whatever you’ve pledged to deliver in exchange for the money raised.
  • For friends and family
    It could be any of the above plus the risk of ruining a good relationship if things go wrong.

In other words, getting funding creates an obligation. It means you have a responsibility to make the most of the money you’ve been given.

That might seem like a challenge, but on the plus side it can help you to focus on your business and concentrate on making it a success.

Once you have the money, make it work for you. Use good quality accounting software to keep track of the amount you’ve borrowed, what you use it for and how much you pay back over time. Read Part II of this guide for eight ways you can raise funds for your small business.

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LGBT Small Business – 5 Rules for Managing Cashflow

Cashflow management is vital for a growing business.

A cash reserve provides the cushion you need to manage unexpected events. It also gives you the confidence and finances you need to grow your business.

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Get your invoicing right

Once you’ve delivered a product or service, don’t wait to invoice. That can hurt your cash flow and your business. You should get into the habit of sending invoices for payment quickly.

Consider sending invoices immediately, or on a daily basis, depending on the nature of your work. If you are providing a service, think about asking for a deposit upfront, or a payment part-way through. It’s a reasonable request.

A product or service that has been delivered is the closest thing your business has to cold, hard cash. The sooner you invoice your client, the sooner you’ll receive payment.

 

Five rules for managing your cash flow

Invoicing is only the start. To maintain healthy cash flow, you need more than just strong revenue. You need to be able to collect that revenue too. Here are five rules for managing your cash flow and getting your invoices paid faster:

  1. Keep your books accurate and up to date
    Your cash flow is only as good as your accounting and reporting. Don’t let this get out of hand. Make sure your accounting information is updated regularly. Then you can see the financial state of your business at a glance.
  2. Don’t be too lenient with your customers
    Be direct and fair without being a pushover. A clever but polite invoicing strategy will usually get you a long way. But don’t be afraid to take more formal action if you need to.Keep a close watch on your accounts receivable turnover at all times. If it’s trending up, it might be time to step up your efforts at chasing payment. As receivables age, their quality goes down, so you should act sooner rather than later.
  3. Keep your accounting simple
    If you’re not confident with numbers, hire a professional accountant. Use quality accounting software, so you always know your cash position. It will also help you forecast your cash flow for planning purposes.For example, maybe you’re expecting a big order next month. How will you know if you’ll have the working capital needed to expand payroll? Or be able to buy the necessary inventory? Many small business owners get caught out when a large opportunity turns up. They are unable to take advantage of it due to a lack of cash. Don’t let that happen to your business.What’s more, a reliable accounting system will help you track and report on key business metrics. These include accounts receivables aging, operating margins and inventory turnover. Having a good handle on these business metrics will help you manage your cash like a pro – and take advantage of new opportunities.
  4. Keep your business and your personal finances separate
    This is essential if you want to understand your business cash flow and forecast how it might change. Mixing your business and personal finances can leave you uncertain about business performance.So keep them separate. That way you’ll know how much cash your company is generating. Then you’ll be in a good position to properly pay yourself – and use excess cash to strengthen and grow your business.
  5. Build a cash reserve
    Access to cash will make or break your business. The ultimate step to managing cash flow like a pro is to build a cash reserve. A cash reserve provides the cushion you need to manage unexpected events. It also gives you the confidence and finances you need to grow your business.It’s not always possible to build a large cash reserve. But if you do, it can insulate you from the economic cycle and the whims of banks and other lenders. It will also let you take advantage of opportunities when they present themselves.For example, you may have the opportunity to pick up inventory at a deep discount, or take on a large order or new client. With a cash reserve, you can quickly take advantage of such events.Building a cash reserve puts you in a position of strength. It might mean paying yourself a little less in the short term, but in the long term it will put your business on the path to success. That ultimately means more money in your pocket.

Make cash flow work for you

“Cash is king” might be a trite expression, but it really is vital for small businesses. Following the five rules above will help ensure that cash serves you – rather than the other way around.

 

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