michael zaletel
Well-known member
Hello Everyone:
YOUR ADVICE NEEDED (Please read below for details):
So here is my question for all of you. What would be the best source of working capital for our situation? Venture Capital? Bank Financing? Independent Investors? And what would be the wisest way to structure a working-capital cash infusion for the purposes of the growth mentioned above?
I consider it an honor to be a part of such a incredible community of intelligent, experienced, creative and passionate people. Who else better to go to for business advice.
As some of you may know, I am the majority shareholder of an online hotel reservations business that I founded 9 years ago in 1999. Computer Graphics, Photography and Filmmaking are my passion and background (and college degree) and that is why I am also a proud Red Owner. Our hotel reservations business has been profitable for the past 7 straight years and has had gross revenues in excess of $15 million per year for the past 5 years with an efficient staff of about 25 people. Our sites get as many as 10,000 to 25,000 unique visitors a day.
http://www.i4vegas.com
http://www.i4reno.com
http://www.i4laughlin.com
http://www.i4hawaii.com
Having been raised in an entrepreneurial family, I have owned and/or been involved in many types of small businesses over the years. Everything from food service to construction, retail clothing to printing, Yoga studios to 3D animation and Internet marketing to brick and mortar retail computers. Among all of those small businesses, the one I currently have is by far the best in terms of the economic model.
You see, in the online hotel reservations business (think Expedia but smaller), you collect ALL of the money up-front when someone books a hotel reservation and you do not have to pay the hotel until 15-days after the guest checks out of the hotel. From a cash-flow standpoint, it is the best possible model. The primary financing challenge to growth is from a working capital perspective because the hotels require a Letter of Credit secured by a CD to cover the potential bookings and also because expansion into new markets (negotiating new contracts and building out new sites) takes money. Although we are debt-free and have sufficient capital to run the current business, we do not have enough capital to fuel growth.
In addition, our business is extremely efficient using the highly innovative software technologies developed in-house for managing PPC, SEO, CRM and etc . I see the current economic downturn as the opportunity of a lifetime to grow our business and expand into markets that we were simply locked out of in the good times because the hotels "didn't need any more help" filling rooms. Also, the cost of great programmers, designers and developers will be lower over the next 2 years than perhaps anytime in the last 10.
This is where I really need your advice. I would like to raise $10 Million in the next 60 days to fuel our expansion over the next two years. The money would mainly be used to build out additional city travel sites, expand into air-packaging and to post letters of credit with hotels in new markets like Manhattan and even Goa, India. (We already own over 500 city domain names based upon our already successful trademark brand).
We have impeccable credit with over 70 major hotel/casinos in Las Vegas, have always paid all of our bills on time, carry zero debt and have excellent banking relationships. We also have an incredible and extremely efficient team of talented people and perhaps the most innovative e-commerce platform in our industry. All we lack is the working capital to grow. With so many people losing countless millions in the stock market each day, it seems a shame that a solid business model with tremendous growth opportunities like ours is lacking the working capital to fund that growth. We are one of only a small handful of companies (Expedia, Travelocity, Orbitz, Vegas.com and us) trusted with direct hotel contracts in Las Vegas and it is very, very difficult to break into this business.
YOUR ADVICE NEEDED:
So here is my question for all of you. What would be the best source of working capital for our situation? Venture Capital? Bank Financing? Independent Investors? And what would be the wisest way to structure a working-capital cash infusion for the purposes of the growth mentioned above?
Your thoughts and advice GREATLY appreciated.
Sincerely,
-shooter
YOUR ADVICE NEEDED (Please read below for details):
So here is my question for all of you. What would be the best source of working capital for our situation? Venture Capital? Bank Financing? Independent Investors? And what would be the wisest way to structure a working-capital cash infusion for the purposes of the growth mentioned above?
I consider it an honor to be a part of such a incredible community of intelligent, experienced, creative and passionate people. Who else better to go to for business advice.
As some of you may know, I am the majority shareholder of an online hotel reservations business that I founded 9 years ago in 1999. Computer Graphics, Photography and Filmmaking are my passion and background (and college degree) and that is why I am also a proud Red Owner. Our hotel reservations business has been profitable for the past 7 straight years and has had gross revenues in excess of $15 million per year for the past 5 years with an efficient staff of about 25 people. Our sites get as many as 10,000 to 25,000 unique visitors a day.
http://www.i4vegas.com
http://www.i4reno.com
http://www.i4laughlin.com
http://www.i4hawaii.com
Having been raised in an entrepreneurial family, I have owned and/or been involved in many types of small businesses over the years. Everything from food service to construction, retail clothing to printing, Yoga studios to 3D animation and Internet marketing to brick and mortar retail computers. Among all of those small businesses, the one I currently have is by far the best in terms of the economic model.
You see, in the online hotel reservations business (think Expedia but smaller), you collect ALL of the money up-front when someone books a hotel reservation and you do not have to pay the hotel until 15-days after the guest checks out of the hotel. From a cash-flow standpoint, it is the best possible model. The primary financing challenge to growth is from a working capital perspective because the hotels require a Letter of Credit secured by a CD to cover the potential bookings and also because expansion into new markets (negotiating new contracts and building out new sites) takes money. Although we are debt-free and have sufficient capital to run the current business, we do not have enough capital to fuel growth.
In addition, our business is extremely efficient using the highly innovative software technologies developed in-house for managing PPC, SEO, CRM and etc . I see the current economic downturn as the opportunity of a lifetime to grow our business and expand into markets that we were simply locked out of in the good times because the hotels "didn't need any more help" filling rooms. Also, the cost of great programmers, designers and developers will be lower over the next 2 years than perhaps anytime in the last 10.
This is where I really need your advice. I would like to raise $10 Million in the next 60 days to fuel our expansion over the next two years. The money would mainly be used to build out additional city travel sites, expand into air-packaging and to post letters of credit with hotels in new markets like Manhattan and even Goa, India. (We already own over 500 city domain names based upon our already successful trademark brand).
We have impeccable credit with over 70 major hotel/casinos in Las Vegas, have always paid all of our bills on time, carry zero debt and have excellent banking relationships. We also have an incredible and extremely efficient team of talented people and perhaps the most innovative e-commerce platform in our industry. All we lack is the working capital to grow. With so many people losing countless millions in the stock market each day, it seems a shame that a solid business model with tremendous growth opportunities like ours is lacking the working capital to fund that growth. We are one of only a small handful of companies (Expedia, Travelocity, Orbitz, Vegas.com and us) trusted with direct hotel contracts in Las Vegas and it is very, very difficult to break into this business.
YOUR ADVICE NEEDED:
So here is my question for all of you. What would be the best source of working capital for our situation? Venture Capital? Bank Financing? Independent Investors? And what would be the wisest way to structure a working-capital cash infusion for the purposes of the growth mentioned above?
Your thoughts and advice GREATLY appreciated.
Sincerely,
-shooter
