Cash flow has been one of the biggest challenges over the past year for my multi-media production company, Foot In Mouth, Inc. Not cash, but cash FLOW. I have brought in nearly $1 million from some top Fortune 500 companies and investors from three countries and yet, it hasn’t been a smooth ride. In some cases investors have made verbal commitments, but it has taken some time for the funds to clear.
With advertisers, especially the bigger ones that are now coming to the table, there is an even longer time between them approving the deal to signing a contract to actually paying the money. So, I went shopping for a bank to help me bridge the gap between the highs and lows and help me effectively manage my business.
We are in a conference room at our Tribeca offices in lower Manhattan doing an interview with our new banker, Michael from Citibank. Cameras are rolling. One camera is mounted atop a tripod fixed on Michael and the other is swinging back and forth between my business team on one side of the table and Michael on the other.
It’s October, 2007 and I’ve just closed my first six-figure deal with Overstock.com and received an overseas investment of $40,000. I’m about to turn 22 years old and my talk show, THE EDGE WITH JAKE SASSEVILLE is in pre-production and preparing for a launch after Jimmy Kimmel Live! in 40 markets nationwide in February, 2008.
It’s an underdog-come-from-behind story of battling traditional TV, network programmers and managers in Hollywood – but finally, now, I’ve managed to carve out a space for my show in late-night programming. The show is independent from top to bottom – we write it, produce it, star in it, distribute it, sell it and promote it. I have the ultimate freedom that any entrepreneur loves but also proves especially difficult when trying to finance the show.
Michael is tall, probably more than six feet and African American. We joke that he will rule the basketball team of my production company. The joke dies. We don’t have a basketball team. My producer shakes his head and mutters "that bit certainly won’t make it on air."
I’ve assembled a production team – some of the best in the industry — of 35 producers, writers, editors, shooters, show runners, publicists and tech. That team is depending on me to feed their families and pay their rent. Money arrives in chunks and just as it arrives, I immediately have to be going after the next big advertiser. I’m always running short, going after more, making deals, selling the show, paying my staff. It’s essential to have a bank that can keep up with me.
Show Jake the Money!
I originally went with the "hip" and "cool" WaMu (Washington Mutual), but I was frustrated that they couldn’t do a thing for my company. My overseas investor check took seven business days to clear, and the bank wouldn’t advance me a dime. So, when I landed a deal with super-cool e-discount site Overstock.com, I knew I had to take my business elsewhere. I realized very quickly that banking is only for big business.
But what about giving help to young entrepreneurs with big ideas? I’m 22. I have a great credit score and advertisers are signing on the bottom line. I have a business model that is working. I am showing income. I should have a bank that caters to the needs of a young entrepreneur, right?
Michael said he’d be different. Citibank was the bank for us. He was going to work hard for us so that we could excel and keep all banking under one roof – for my production company, my personal accounts and my non-profit foundation. He talked about how he had worked with young people, start-ups and companies in film and TV. He discussed overdraft protection, a low interest line of credit, credit cards and a small business loan. He spoke very fast and stuttered and stammered a bit. We had to add subtitles in the edit so we could understand him.
I thought we had a winner with Citibank. Boy, was I wrong!
After depositing the Overstock.com check in October, I deposited six figure checks in December from our second sponsor, the classic all-American brand, Ford Motor Company, and another private investment from London. I’ve peddled over a half a million dollars through my Citibank account, and have written checks for nearly that much. I’ve produced 13 episodes of my television show, cleared a time slot in over 35 million U.S. homes and accumulated over $1.5 million in advertising deals deep in sales cycles. But I need to bridge the financial gaps in those deals until they close.
No Love from Citibank
Citibank decides to stop returning my calls when I ask for the small business loan that it had said wouldn’t be a problem. Michael stopped dropping by my office. When I finally corralled him in his office with cameras in tow, he said we’d been denied the loans because I couldn’t guarantee the loan.
It begs the question: How do you get a bank to lend you money if you don’t already have the money in the first place?
I’m still trying to figure out the answer. I do know that it is crucial to open your business early. When you get the idea for a business, spend a few hundred dollars, incorporate or LLC the company and make it official. Find a family friend who is a lawyer like I did. The longer history you have as a company, no matter if you are making money or not, the better case you can make for a bank loan.
Another key is to have credit cards even if they don’t have any balance on them. When you pay off your credit cards or decide you don’t want yours anymore, don’t cancel the card. Instead, cut up the card, make sure it’s paid off and allow the lines to grow. Canceling the card damages your credit score when a bank goes to research you. Also, in a pinch, having some credit card credit ready to go can get you through short term.
For me, it’s a different game than most entrepreneurs. I’ve dealt with Citibank and Washington Mutual and now I’m looking at a relationship with the folks at Chase. The bank that gets it and is smart enough to assist me is going to get both their loans repaid with interest and also the PR and buzz on my talk show. For others who don’t have the platform of a syndicated talk show on ABC affiliates, the battle can be huge. I think the bottom line is: keep looking and never stop. There is a bank out there that will say "yes."
Also, before the printing of this column, we made several calls to Michael at Citibank and our calls were never returned.
And with that, see you later, Citibank, and hello, Chase!
For more information on THE EDGE WITH JAKE SASSEVILLE, please visit www.edgewithjake.com.