In 1999, after working on several startups with great ideas that fizzled because of bad or inadequate management,  we realized the value that seasoned management can bring to startup and early stage companies and decided to form Wellspring FV just for that purpose.

The small business financing game:

The small business financing world is rife with logical disconnects. Lots of  “Catch 22” roadblocks. 

Some examples:

The cadres of consultants and sycophants that exist to serve emerging businesses all need to get paid in the one thing that growing companies don’t have: CASH. We get paid in a currency you do have in abundance: equity in your company.

Additionally, we have a built-in incentive to kick butt for your company because if your company flops, our time investment is worth nothing. Nada.

Bupkis.

Zilch.

Most venture funds will not even look at your proposal unless you have reached $2M or more in annual sales. They don’t say how you are supposed to get to that point, mainly because it's not their job to figure it out.

That's what we do.

Despite being saddled with government regulations to promote small business, traditional lending sources like banks are not able to deal with information technology companies because they need hard assets to attach before loaning out money. You will have to pledge your personal assets to even get these guys interested.

Consultants have a way of finding more work for themselves while they are “diligently performing on your behalf.” Can’t blame them, being a consultant is a tough row to hoe. Once we’re on board, we do whatever is necessary to advance the company. We get paid by how successful the company becomes, not by the hour.

Entrepreneurs love to talk about “angel investors” who fly in on gossamer wings and invest in companies long before professional VC’s become interested.  Unfortunately, few entrepreneurs know how to find these angel investors. They are the “holy grail” of startup finance. We know the angel community and have actively participated in it for over 10 years. Wellspring FV itself is partly funded by angel investors.

We’ve crafted our business model to span these disconnects and to provide many new opportunities by removing them. If you read the investor’s information section, you can see the value that our company brings to the investor side as well.

How we work with you:

Entrepreneurs are understandably touchy about equity positions in their new companies. To start a company at all, you have to have a vision of great success against all odds, and a desire to have as much of that success in your pocket as possible. We can relate to that. We’ve been there.

If we become interested in your company after a preliminary meeting or business plan submission, we will spend time performing our due diligence to determine the true opportunity that your business presents.

We will spend as much time as necessary at your location, meeting with your people, understanding the dynamics and current status of the business. This will have the additional effect of letting you and your team get to know us. After all, if your company becomes one of our portfolio companies, we’ll be spending a lot of time together.

After gathering all the information we can from your company, we will put in additional time checking out competitive companies, personal references, industry research, and anything else we can find that will help us to understand the future potential of your company.

We then formulate a scenario that we think is most likely to occur within your industry and, specifically, your company. This leads us to the exit strategy and likely valuations at that time. Finally, we work backward from there to estimate the amount of work we will need to do to help your company achieve that goal. This is how we derive the equity share that Wellspring FV will require in return for its efforts.

Future value:

You know there will be dilution when you need capital for your growing company. The game is to get the best valuation and terms for your company after getting the investor (be they angel or professional) interested.

We believe that your company will achieve a much higher valuation with the addition of Wellspring FV’s experienced management than it would otherwise.

The reasons are twofold. First, when combined with your existing team, we present a very experienced management staff to the VC’s. They value this very highly. Secondly, we are quite experienced in negotiating VC investments, and will do our very best since we will be shareholders in your company just like you.

Let's talk:

If the Wellspring FV story makes sense to you and you fit our criteria, please give us a call or email to schedule a meeting. We would enjoy exploring the opportunity to help you and your company achieve its goals.

Whether or not you are a candidate for a Wellspring FV deal, we encourage you to join our mail list. The “FV Flyer” provides timely information, market analysis and, of course, self-serving PR by the truck load. To subscribe, please fill out our investor contact page.

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