Alain Mehani of Israel Discount Bank Schools Us on Seeking Capital for Your Business and Crowdfunding

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Alain started his career in banking in 1995 with the Public National Bank. He worked with the bank through the acquisition by HSBC. In 2008, Alain began his career at Israel Discount Bank to help them grow the U.S private banking business. Since 2008, the domestic business deposits for Israel Discount Bank have grown from $0 to $1.2 billion.

Seeking Capital

It is a major decision when a business owner decides to seek access to capital. They might have gotten to a point where they have used up all of their personal finances and realize that they must go to an outside source. On another note, they just might be looking to improve their business without tapping into personal finances. Besides going to the local financial institution, business seeks the help of private investors. So what should a business in these positions consider and look for when approaching private investors?  “Whether a business decides to get capital from the bank or a private investor, the business should always consider business environment and their own financial condition,” commented Alain.

Unfortunately, most business that look to access capital from investors don’t realize the extent of the (the investor) involvement. Often times, a potential investor will want much more than the business owner is willing to give. “A business may go in thinking that they will get a large capital infusion for a very little in return to the investor, whereas the investor understands the risk of the investment since the business owner is taking capital outside of his/her revenue stream, which means that additional capital is needed because most likely, they can’t do it from their operating income and can’t support it from their own net worth,” explained Alain.  “For the most part, investor will expect a very large share of the company, often times more than 50%. I don’t believe that a private investor should be a business’ first resort. Before approaching an investor, business owners should talk to his/her current financial institution to see how they can work with them to keep the business a float,” he added.

 The Positive in Crowdfunding

Crowd funding, a new way to raise money for a business venture, has helped many startups reach their goal in the beginning stages. Although this form of funding has gotten praise from many, many investors feel that this may impact the investment community. “I don’t agree that this is the case, it actually benefits the business more than the investor,” commented Alain. I absolutely love crowdfunding, at our financial institution; we actually worked with a client from Exceed Network who used this for her new business. After raising a substantial amount of cash through crowdfunding, it only made Exceed Network and future investors more excited about her business plan and where the company was going,” he continued.

By Lolita A. Alford

Interested in learning more on financing your business? Contact us at Exceed Network and see how we can guide you through the steps needed for success!


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