By Wynce Nolley
Nov. 15, 2013
Local entrepreneurs with the next big business idea usually face an uphill battle when it comes to bringing their vision for a small business to fruition. Usually one of the first, and perhaps most vital, obstacles that they must cross in order to gain momentum for their project is securing the initial funding to get their business off the ground.
|Photo by Robin May|
|Blue Victory Holdings' Seenu Kasturi|
Typically, the average entrepreneur has two options when seeking that initial capital. They can either apply for a business loan from the bank and hope they have the necessary credit and collateral to get it approved, or they can seek out and arrange a deal with private investors or a private equity firm willing to supply the financing.
One such equity firm is Blue Victory Holdings, a diversified private equity firm that focuses primarily on professional services, operations management and restaurant investments.
“We have accredited investors that we raise capital from to invest in very specific deals,” says Seenu Kasturi, president and CEO of Blue Victory Holdings. “We’re in offshore staffing, we’re in the restaurant business and we are in the real estate business, so those are the three segments we are primarily invested in. We invest in seasoned operators, provide financial support and help with financing and invest equity into the deals where they can acquire and operate the restaurants.”
Since its inception in 2009, Blue Victory Holdings has invested in more than 10 companies, five of which are in Acadiana.
“There were four deals where existing companies would be invested into, but the remainder was startups. All of them are, in a way, startups,” says Kasturi. “We invest the capital to start the firm and basically we find the operators, or the operator finds us, and brings the deal to us or we bring a deal to them. Then we help them get everything done to where they can depart and form a new entity and open accounts and become a franchisee and do the whole nine yards.”
But Kasturi notes that while his firm’s chief focus is on businesses relating to offshore staffing, restaurants and real estate, it’s always a good idea to keep your options open, especially when it comes to investing in a new business.
“We don’t pigeonhole ourselves into doing just restaurants or just real estate,” says Kasturi. “We’ll look at any deal as long as we know that we can get the expertise or we can have our contacts in the credit industry that give us the expertise internally or go out and hire the expertise to run it. As long as we can do that, we’re comfortable with the trust factor and our capability. Then we’ll invest in that business based on its own metrics. What we want to do is operate it for income and be comfortable holding it long term.”
Local entrepreneurs have several options at their disposal when setting out to find the right resources to build their business. Some of them are even free, like those offered by the Louisiana Small Business Development Center, the state’s largest and most accessible source of assistance for entrepreneurs and the only statewide, nationally-accredited program that provides business consulting to entrepreneurs at no cost.
“The short explanation is that we’re business consultants, and we work with all kinds of different businesses. Some are seeking private investment, some are seeking bank loans and some people are seeking grants,” says Mark Galyean, director of the Louisiana Small Business Development Center at UL.
Galyean and his office essentially work as guides for small businesses and startups by offering the essential business wisdom and resources that entrepreneurs would need to get the ball rolling with their projects.
“We guide startups through the process of starting their businesses,” says Galyean. “We help them do the market research, we do all the financial modeling for their business plans and we provide technical assistance to existing companies. A lot of what I do and a lot of what my co-workers do is help clients create the business plans that they need either to pursue a bank loan or pursue a private investment. We coach them and get them ready for the currency for either situation.”
And when clients are ready to face that situation, the SBDC helps point them in the right direction as far as a financier.
“We’ll give them lists of banks that we know that are making loans to small businesses,” Galyean says. “There’s quite a few banks around the area that are loaning money to people, but they have to be creditworthy and they have to have collateral that the bank is going to accept. So it’s really a process of helping them package their project whether it’s a loan package or they’re seeking private investment or whatever they need.”
But for every local startup that gets its capital through a bank loan, there’s an investor willing to match it.
“I think that there are huge opportunities here,” says Kasturi. “We’re looking to raise capital again because there are a lot more opportunities than we have capital for. The internal rates that we can generate are phenomenal because there’s just special situations all over the place. We’re looking to raise more than $10 million in 2014.”