Category Archives: Finance

BusinessWeek: Structuring a Business with Investors in Mind


In the early days of starting a business, you might be tempted to gloss over ownership structure, equity stakes, and other seemingly boring details. After all, you might think, as long as you keep taxes low, paperwork uncomplicated, and partners motivated, better to deal with the big stuff first. But these decisions can have a significant cost down the road, particularly for entrepreneurs who seek outside investors.  Read more of my latest column at businessweek.com

BusinessWeek: Get your personal finances in order before startup


Aspiring entrepreneurs preparing to start businesses will find that savings, credit access, and credit scores matter more than market research and investor presentations

Read my latest story for BusinessWeek

BusinessWeek: Making your business more appealing to lenders

As the recovery limps along, small business owners looking for bank credit and loan officers assessing their applications have their work cut out for them.  Read more from my latest story for Bloomberg BusinessWeek.

BusinessWeek: Don’t undercut your equity stake

By Monica Mehta

After a decade’s lull, the IPO is back, stoking dreams of entrepreneurs looking to cash out. Yes, dramatic market swings have changed some game plans recently, but in the first two quarters of 2011, 79 companies issued initial public offerings generating $24.3 billion, more than double the amount raised in the same period last year, according to PricewaterhouseCoopers. Often overlooked by newbies: By the time a company is ready to go public, the founders usually have diluted their personal ownership stakes considerably through previous financing rounds.

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Fox: Are public unions loosing influence?

Monica Mehta Fox Business

Monica returns to Fox Business Cavuto to discuss growing M&A activity and the declining influence of public unions with legislators.

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BusinessWeek: Raising Seed Capital Now

Investors and entrepreneurs who won at the fundraising game during and after the Great Recession offer advice on landing equity money

By Monica Mehta

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BusinessWeek: Raising Capital With Convertible Notes

Converts look like equity, but taste like debt. To serial investors they’re brussel sprouts. But to certain entrepreneurs and angels, they’re what’s for dinner.

By Monica Mehta

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BusinessWeek: Three Alternatives to Big Bank Borrowing

Small businesses that are rejected by the banking behemoths shouldn’t overlook nonbank lenders, community and regional banks, and community development financial institutions

Bloomberg Businessweek
By Monica Mehta

If you haven’t had luck landing a business loan or credit line from the big banks you’ve approached, don’t expect your odds to improve any time soon. The Basel III guidelines, intended to prevent further financial crisis, will require lenders such as Bank of America (BAC), Citigroup (C), JPMorgan Chase (JPM), and Wells Fargo (WFC) to substantially increase the capital they hold against risk-bearing assets—up to five times what they are required to maintain today. In anticipation of the changes, which will start to go into effect in 2013, big banks are making changes to lending practices now. They’re increasingly “terming out” small business lines of credit as they reach maturity, according to several lenders and intermediaries with whom I’ve spoken recently.

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BusinessWeek: Using a Joint Venture to Expand

Bloomberg BusinessWeek
By Monica Mehta

Small businesses can benefit from formal and informal partnerships. Both sides should be clear on the terms of the deal from the start

In an environment where capital is scarce, I urge small business owners to consider collaborating with other businesses to reach new customers or broaden their offerings without the cost of developing additional expertise or hiring more employees. Unlike a merger, a joint venture lets two companies maintain separate identities. They can enter into the partnership understanding that it may be short-lived and predicate the steps to unwind it. To give you a sense of how such arrangements work, I spoke recently with two entrepreneurs who described the nuances and offered their advice.

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BusinessWeek: Five Rules for Collecting Late Payments

Bloomberg BusinessWeek

By Monica Mehta

The warning signs of a customer’s cash-flow woes are easy to detect. Reduced orders, slowing payments, a change in phone number or business name, and a reluctance to get on the phone are all signs that trouble is brewing. Requests for duplicate invoice documentation or claims that “the check is in the mail” are also obvious stalling techniques. How should you respond to delinquent customers to improve your odds of getting paid? As business bankruptcies near a 16-year high, an informed response and a thorough credit policy are fundamentally necessary.

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