Where do I get the capital?

[makethings]

Hello..

I have some inherited land of substantial size overseas in a tropical climate. I have been pondering the thought of hiring people to plant either sugar cane, palm trees, or jatropha in an attempt to process these crops to produce either sugar, or palm oil with the profits re-invested towards growing the business to one day being a bio-fuel producer.

But to even set up a mill to make sugar can cost a lot of money. I think the very minimum I would need would be 100K, maybe up to the million dollar range for more production capacity.

So I wonder where would a guy like me go and get that kind of loan or where would I find investors to invest that kind of money into my business?

[MoreMiles]

Dragon Den on CBC? :cheesygri

[Just Confused]

Traditional banks won't touch you, especially in today's market and a proposed offshore operation, to boot.

Try presenting your idea to some mid-sized law firms that previously did real estate deals. Through those deals, they would have some investor contacts among people who have cash and are looking for places to put it to work. Of course, they would expect you to do the legal work through them.

Also, keep in mind these kind of investors would be looking only at the medium term, say up to a few years and would be looking for returns (receiving interest) in the 10 to 15% range. Once you get your business running and established, then you can look at more traditional banks and better rates.

It goes without saying that you'll need a fairly detailed plan of your vision with financials, business assessment, forecasts etc. It's not like TV... investors don't buy "arm waving" ideas. Your proposal (sales pitch) needs to be specific down the exact amount of money you'll need, how and where it will be spent, your projected cash flow and when they'll get their money back.

You'll have to become an expert on the sugar or palm oil business; whichever one you pick to go with.

It's frustrating when you have a great idea and nobody sees it's potential until you get it done. Good Luck.

[bruizeman]

yes i agree with jc.

at your seed stage you will be giving up a lot to get it started. you most likely will not have to pay cash interest... but u will pay pik interest.. and there will be significant equity portions attached to it.

also you will most likely have to pledge the land as collateral... so if it fails...u really do end up with nothing

[Drew_W]

Sell the land unless you have a MASSIVE risk tolerance.

[grant]

But to even set up a mill to make sugar can cost a lot of money.
Have you looked into how realistic your plan is, even with money?

My sister lives in barbados and says there's just 1 or 2 refineries on the island, and all the sugar-cane grown is taken there for processing, i.e., people don't have their own refineries.

[imie]

Coffee if more profitable - there seems to be more demand for organic coffee. Well, I know that coffee are mostly grown organic because we use to grow them. Heck it even reseeds itself - just leave em and they grow.

But there is demand for specific type of coffee and special type of woods as well.

Some woods are being bought before they are ready to be harvested. Melina Tree is one of these.

My sis had a partner with some Swedish investors to grow sunflower for oil. But unfortunately, the country they were testing had too many rules and corruption that they end up taking the idea elsewhere.

There are investors interested in sustainable products... just need to find them.

[heavyweight]

One option for you is to search for an entrepreneur, professional management firm, or another source that is interested enough in the general idea that you laid out to consider partnering with you (for likely a significant portion of the venture) in exchange for

1. Conducting research
2. Developing a business plan and attractive marketing plan
3. Securing Investors
4. Setting up the production facilities, logistics.
5. Securing customers
6. Securing more investment
6. Growing the business

So basically, you can be involved to whatever degree you want, but you find someone with potential to minimize all parties risk and make this into a much larger business that you could realistically do.

In exchange, you will likely have to give up a large percentage, which could exceed 50%, depending on the circumstances.

There are many people different types of people that you may find by searching for a candidate. Make sure you are selective enough that you get the best help you can. The quality of partner you are able to find will vary according to the perceived potential of your venture.

[BillyParadise]

Sell the land unless you have a MASSIVE risk tolerance.

Why on earth would he sell the land? Do you even know where the land is? Let's try to avoid the "OMG Real Estate! Sell! Sell! Sell!" reaction, ok? There are places in the world where real estate is not only a good long term investment, but a good short term investment too. With your comment, I'll bet you think every farmer should sell his land, walk away, and put his money in a bank - but not more than $100k in any one bank, right?

I think it's great that you are trying to find something to do with the land to make it earn a profit. If sugar is your thing, investigate where the local mill is. You may not have to build your own - in fact, it's unlikely. What do the other farmers in the area do?

[aww1970]

Curious as to how much of your own capital you are putting up, or able to put up?

[MoreMiles]

Why on earth would he sell the land? Do you even know where the land is? Let's try to avoid the "OMG Real Estate! Sell! Sell! Sell!" reaction, ok? There are places in the world where real estate is not only a good long term investment, but a good short term investment too. With your comment, I'll bet you think every farmer should sell his land, walk away, and put his money in a bank - but not more than $100k in any one bank, right?

I think it's great that you are trying to find something to do with the land to make it earn a profit. If sugar is your thing, investigate where the local mill is. You may not have to build your own - in fact, it's unlikely. What do the other farmers in the area do?

If the OP does not live there to supervise, then the business will likely fail. In that case, selling the land would be a better option. You can never run a business without direct supervision. You can hire someone. That person will either not care or have the ambition to takeover your business. You're left with a family member or yourself.

[Kuurgen]

Okay,

Colour me curious. What country?

I am not sure how palm oil is extracted from the leaves but I can imagine it's an expensive/tedious process.

Do you speak the language fluently where the land is located?

Is the property on an island? If so whats the cost of freight between the country's port and the island?