Most MLM businesses startup with personal capital, investments from family and friends and possibly from a “random” angel investor.
Although it would be nice to think that venture capital firms were salivating to fund direct selling companies, this is not the case. First, the amount of money needed, which is often merely a few hundred thousand dollars, is “too small potatoes” for most venture capital funds. Even the best MLM companies are often started by inexperienced business persons. Venture capital firms are not comfortable in this context.
Rather, most MLM businesses startup with personal capital, investments from family and friends and possibly from a “random” angel investor. This is not to say that development of a good business plan and pro forma is not important to asking such individuals to participate. However, it is more likely that the investment will be provided on the basis of a personal relationship and trust, along with other loyalty factors.
At a later date, if a MLM company is successful, you will find investment banking firms beating a path to the door to invest. As you look at the success stories of Silpada, Herbalife, Pamper Chef, Visalus, etc., it is evident that investment groups are enamored by MLM companies with a solid track record.
For executives looking to start or are already running an existing direct selling company, we offer the MLM Startup Conference for MLM Executives in Las Vegas. One of the many topics covered at the event is how to raise capital in order to fund your MLM startup company. For over 25 years, this conference has helped entrepreneurs start and grow their network marketing businesses. For more information, visit our conference flyer page.
Visit www.mlmlegal.com and www.mlmattorney.com for more information and updates on the direct selling industry.
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Our next Starting and Running the Successful MLM Company Conference takes place October 24th & 25th, 2013 in Las Vegas. Call 503-226-6600 or 800-231-2162 to register.
