I am shopping a venture capital deal that has awesome potential to put some serious dollars in my pocket in the coming months. I could realistically find an investor that wants to go forward with me on my new project but not necessarily want to pay off my past debt. So how do I receive an investment to get my current project funded and profitable without my debtors wiping out my funds?

Denise Martin, Founder, Dome It!, author, “Eating my Way to Heaven”



Your question reveals two “red flags” that are going to deter investors: You seem to want to benefit personally from the investment, and you would like to have your debt repaid by investors.

Investors will risk their capital only if they see a reasonable opportunity for earning a large return, and paying off debt and the entrepreneur make that much less likely.

First, there must be a clear and continued separation between your personal finances and whatever business entity you are creating. Next, you must prove to investors that the “Dome It!” venture can grow and sell produce from the greenhouses described in your videos. Then they will want to see a detailed plan for how you would use their capital to establish and grow a commercial enterprise that will become profitable and provide them with a desired return on their investment.

Earlier this year, our Norris Institute seed capital fund invested in a venture close to what you envision. Garden Fresh Farms is a sustainable indoor grower of produce, herbs and fish. The founder and his family spent three years developing and testing the growing systems, and exploring local markets for their products. Then they took on a business partner to help oversee the expansion of their venture by creating separate “Fresh Farm” entities, each one funded by investors and managed by the parent company.

This might be a business model for you to consider.

About the author: Michael P. Moore, director, William C. Norris Institute, Schulze School of Entrepreneurship, University of St. Thomas