Raising capital to fund your network marketing startup company can be tricky. In fact, there is no clear-cut answer to finding funding. However, there are options available to MLM company owners. There are several giant direct sales companies operating today that began with a very limited budget, just like you: in their basements, bathtubs, garages, and space bedrooms. Many of these companies grew organically to the huge size that they are now. You, however, may be in a different situation, where an influx of capital is absolutely necessary to keep your business afloat.

This article will help to provide you with details about how you can get free and trusted information about how to fund your MLM business. Experts generally suggest that it costs around $100-$200 thousand to start up a direct selling company. This article will provide you with some ideas as to where to find startup funding and links to information online, written by experienced MLM industry experts who’ve been asked thousands of times, “Where can I find funding to start and grow my MLM business?”

Here are three of the most common options MLM business owners consider when they are looking to fund their network marketing startup:

1)      Do you have a substantial recruiting background? If you are a seasoned recruiter and are able to attract a strong line of consultants then your need for capital will decrease considerably. Expert MLM Attorney Jeff Babener always says, “Your need for capital is in direct inverse proportion to your ability to recruit.” If you are able to attract a strong sales force then your need to raise capital outside of the company may greatly diminish. Consultants will be the key to your success. If you are not a seasoned recruiter, then you may want to consider hiring someone who does have recruiting experience.

2)      Do you have personal capital? MLM startups often find the capital that they need in their own bank accounts, or the bank accounts of family and friends (often referred to as your ‘warm market’). In some cases, an angel investor will be willing to invest in the company (a wealthy uncle, perhaps?). These sorts of investments are based primarily on the personal relationship, as well as trust and loyalty.

3)      What about public financing? Unfortunately, not many venture capital firms are interested in investing in startup network marketing companies. The startup MLM company has the tendency to be run by inexperienced business owners needing only a few hundred thousand dollars, which isn’t very attractive to large investors. In nearly all cases, investment into the company will come from a close source. Once your business is worth millions, then the investment firms will take notice. You can read about some of the most famous MLM success stories on these pages: Silpada, Herbalife, Pampered Chef, and Visalus.

Another great place to get information on raising capital for your business is at the Starting and Running the Successful MLM Company Conference where industry experts will provide you with individual, one-on-one time and attention. Each speaker will sit with you and discuss your personal situation and specific needs. The easiest was for you to attend the conference on a budget is to visit the page of our Innovation Campaign. The October 2015 Innovation Campaign offers network marketing company owners the ability to receive two free tickets to the next Starting and Running the Successful MLM Company Conference in Las Vegas (a $345.00 value!). All you have to do is fill out a brief survey at our sister website: www.mlmattorney.com, and we will contact you right away to confirm your free tickets to the event! Attending this event will give you direct access to several MLM industry experts, including capitalization experts and MLM legal expert, Jeff Babener. Visit our Innovation Campaign page for complete information about the conference, including the topics that will be covered, the speaker/expert list, videos, and much more. For additional questions call 800-231-2162.

It won’t be easy raising capital to fund your MLM startup, but we hope that we’ve given you some ideas on where to start. We also hope that you better understand that it is possible to start small and make it big in this industry. For more information on raising capital visit www.mlmlegal.com and www.mlmattorney.com.

If you are interested in attending the Starting and Running the Successful MLM Company conference visit our conference page, view our speaker list, or get more details. All executives/owners of direct selling companies are welcome to attend. Call 800-231-2162 to register.

Our next Starting and Running the Successful MLM Company Conference takes place October 22 and 23, 2015 in Las Vegas. View our conference flyer and speaker list online. Participate in our Innovation Campaign for your chance to receive TWO FREE TICKETS to attend our next conference.

If you’re reading this blog post and the conference dates above have passed, check our website for the current conference dates.

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Visit us at www.mlmlegal.com to learn more.

Apart from general pyramiding accusations, the direct selling industry can learn from the Federal Trade Commission’s (FTC) specific allegations of improper activity. The FTC includes front loading as inappropriate activity stating:

Front-loading or inventorying of product in which excessive product purchases are viewed as prohibited consideration for the requirement that individuals make an initial investment of product purchased to engage in the opportunity.

In the August 1999 case FTC v. Equinox the FTC accused the company of making recruits engage in the following inappropriate front loading activity:

New recruits were front-loaded with $5,000 inventory purchases by being encouraged to “buy-in” at the managerial level.

MLM marketing plans which result in inventory loading distributors should be taken very seriously and avoided. Here are five ways to tell if the direct selling company you are considering joining is reputable or perhaps may be operating as a pyramid scheme:

• Promotions where the business opportunity is the “product.” If there is no legitimate product or service being sold, but only the opportunity itself, then chances are that the promotion is a pyramid scheme.
• Products that are sold at inflated prices. Sometimes pyramid promoters try to mask their true intent by selling a product. Often, the product will be vastly overpriced and thus unlikely to generate much retail activity, thereby indicating that the real item being sold is the compensation plan.
• Programs that require inventory “loading.” A legitimate MLM opportunity doesn’t require you to buy unreasonable amounts of inventory to begin your business.
• Programs that require substantial initial cash investments. According to MLM Attorney Jeff Babener, many states consider a required up-front investment of $500 or more to be “substantial” and thus likely to attract the attention of law enforcement.
• Programs that require mandatory purchase of peripheral or accessory products or services. Some pyramids seek to hide their true face by allowing a minimum price for a “start-up” kit and then compelling the investor to buy more expensive items such as training or demonstration materials. Jeff Babener believes that business-start-up kits and selling aids should be sold at company cost.

For more information on front loading, visit www.mlmlegal.com.

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Our next Starting and Running the Successful MLM Company Conference takes place October 24th & 25th, 2013 in Las Vegas. Call Charity before September 1st to receive a discount! 503-226-6600 or 800-231-2162.

Visit us at www.mlmlegal.com to learn more.