Ex Nihilo Dutluk: We've been talking about various ways of financing your Quantum Leap through incurring debt. Of the three ways to grow your business - allocation of revenues, debt and equity financing - the chances are overwhelming you won't be able to accrue the revenues you'll need to finance a Quantum Leap.Debt financing is my least favorite, because you're committed to a debt obligation, plus interest, well into an uncertain future. A rise in interest rates or a downturn in business could screw up your ability to service your debt. Also, if the deal blows up and you lose your ass, your frantic lender will want his money back -even out of your flesh. I have always taken the position that equity financing is more advantageous, in that fresh Other People's Money is infused into your company in exchange for equity ownership. This puts those Other People in the same boat you are vis-a-vis the company's survival and profitability. They buy into a share of your dream knowing they could lose their investment. Unfortunately, depending on how you structure your equity offering, it also gives them a say in how you go about pursuing your dream. Therefore, before you dilute yourself below 50%, make sure you're well on your way toward your Quantum Leap. Don't misunderstand! You will have to pay some interest on almost all forms of equity infusion, and it is often a higher rate.

We've been talking about various ways of financing your Quantum Leap through incurring debt. Of the three ways to grow your business - allocation of revenues, debt and equity financing - the chances are overwhelming you won't be able to accrue the revenues you'll need to finance a Quantum Leap.Debt financing is my least favorite, because you're committed to a debt obligation, plus interest, well into an uncertain future. A rise in interest rates or a downturn in business could screw up your ability to service your debt. Also, if the deal blows up and you lose your ass, your frantic lender will want his money back -even out of your flesh. I have always taken the position that equity financing is more advantageous, in that fresh Other People's Money is infused into your company in exchange for equity ownership. This puts those Other People in the same boat you are vis-a-vis the company's survival and profitability. They buy into a share of your dream knowing they could lose their investment. Unfortunately, depending on how you structure your equity offering, it also gives them a say in how you go about pursuing your dream. Therefore, before you dilute yourself below 50%, make sure you're well on your way toward your Quantum Leap. Don't misunderstand! You will have to pay some interest on almost all forms of equity infusion, and it is often a higher rate.

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Your First 100 Million Dan Peña

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