June 14 (Bloomberg) -- Entrepreneur Mark Cuban discusses the U.S. Economy and starting a business with Trish Regan at the Clinton Global Initiative in Chicago on Bloomberg Television's "Street Smart." (Source: Bloomberg)
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This guy is an *ssh*le. It makes business sense to start a business with a loan because you get to deduct the loan payments from tax-this is basics. I would honestly rather take out a loan to start a business than to give up an equity share to a silent investor partner *cough* *cough* loan shark* like him...
This guys loves to hear himself. 20 years ago he sold Broadcom to Yahoo for $5.7 Billion ( yes with B) and his current net worth is $3.9 Billion. And he is a Business Guru? There are bullshitters like him or Trump and then there are people who keep minting money quietly and giving back value to the world not big talk. I am honestly amazed whats the big deal about him. He is like those one hit wonders in 80s but some how still think they are cool even now.
Bottom line if you do take a loan, only take 25% or less of what you think you need. In that way whatever happens your not on the hook for 100% of your estimated amount. But i do agree, if you can find a way to avoid a bank.... ALL THE WAY YES AVOID THEM!!! Because a Bank LOAN, aka DEBT looms like an elephant on ones back. because your likely never to acquire the amount needed in time to keep all things in check. Banks loan for the sake of people going in debt. interest rates. they want you in a hole paying them nonstop.
I started my first business with a $180,000 purchase order. I would not have been able to borrow the $80,000 I needed to fulfill the order and show my client that I could deliver without a taking out a loan. Sorry Mark, if you do not have enough savings to cover a large purchase order, you ultimately NEED A LOAN... that is of course, YOU ARE A MORON and give away part of your business to a guy like you.
Obviously, most of you guys don't get the point. He's encouraging to figure out whether your potential business will thrive or not, bootstrapping it before jumping into a loan and get slapped in the face by the reality. Loans should be used as multipliers once our business is solid and under a profitable formula. In the beginning, some mistakes will be unavoidable, better overcome to them with little or no debt.
Stupid mother fucker , do you see ????`t?????????????preperation to a questand i likion ?fuck the system , do you people see how journalist get strai t information ? its just fuckingh around , and i like america
Depends on the business and what it’s for. If you need 10k to buy a trailer to start a transportation business then I don’t see a problem with that. It’s a small amount of money, you can work a job while you start it and if you fail you can sell the trailer. Now in my line of work automotive repair, you should generally buy all the tools and equipment you will need before you even think about opening a shop. You should also have start up money for payroll, parts, monthly bills etc.. then you should have money for your personal monthly bills for a while to ensure you don’t close your business because you can’t pay your home mortgage for 5 months while your business grows its customer base. I do feel that it is ok to get a mortgage for a building because it can be a lot cheaper in the automotive world to buy a building and have a $2,000 per month mortgage rather than a $4,000 per month rent payment. But that’s about it for loans with a repair shop just a mortgage unless you are buying a very profitable turn key business then a big loan might make real sense. All in all it depends on the business and if it makes realistic sense.
I always look for businesses that have a very ambitious owner, he puts his money in his business and reinvests his profits for growth. Those are clear signs i look for when i invest in private equity through my company Grand Bay Investments
Mark I have to disagree with you on the moron statement of borrowing money to start a business.
I started with a bank loan to fund my car rebuild business. I happen to do very well for myself and my family and multiplied my money far more then what I borrowed. And I just keep making more money. If i'm wrong explain my success ?
Maybe he remembers what he went thru after the loan he got. He probably went thru hell, that's why he says you're a idiot if you take out a loan. Just preventing ppl from making the same mistake??? Idk.....just a theory on the guy.
Tree service business. Me and a friend started a tree service on $300. Chainsaw, rope and ladder is all we had starting out. We were making 5k a week in the summer months. It’s pretty hard sometimes, but if you would rather be your own boss then it might be worth it to the right guy.
I borrowed 25 k to.start my business. I purchased a truck, chemicals, got insurance, contracts drawn up and went to work. I could not have done that if I did not borrow.the initial capital required. 15 yrs later I have several full-time employees, great income and live comfortably. It's easy for people like Cuban to sit on a high horse and preach...
Mark Cuban is a morron for stating that only morons start businesses by borrowing money. He started his first real company with " help" from previous customers that he did business with. Soooo, he borrowed their money....
Cuban doesn't know the difference between money and currency, the debt based monetary system we live under. Fact, big head little teeth Cuban got a loan for his bar , paid employees cash blah blah blah. Don't listen to me, I'm only from pittsburgh
Yes took out a loan and say it's for morans that's only cuz he been thru it and it failed that's why he telling people like us don't do it cuz it's a set up basically he right no matter where you get the loan no matter gives a damn about your business but you that's why you someone who really cares and want to see you win and maybe depending on the loan amount they won't ask for it back
Mark Cuban is a friend of a friend so I’ll be nice.
I don’t think Mark understands valuation. A nascent stage business can be valued 3x to 4x times more than a comparable firm because the more l leverage you have, the less your WACC (weighted average cost of capital) will be. If I have a cash flow business, I’ll take debt over equity any frickin’ day. Basic entrepreneurial sense. Mark is an equity investor and if his supposed smart portfolio companies understand DCF and WACC analysis, they wouldn’t want his money.
No wonder Trump hates this guy. A business loan you payoff little by little but you own 100% of it. This guy is like a mob boss, he fronts you the cash for a portion of your business, when you try to go seperate ways he wants ypu to buy him out at a unreal number, so the whole time youve been doing 100% of the work for a 70 percent take, then he want his buyout i bet at significant high return on his initial capital, say he fronts you 300k, now want 500k buyout,, umm yea,, gfy.
Loans are difficult, banks would ask for collaterals and stuffs that we probably won't be able to provide. I was introduced to deep hacking where you get jacked transfer and I gave it a shot and on first trial I got over $20,000. I kept doing it and i have made alot. My friend who I recently introuduced to it has recently bought an apartment in Dubai. Expeditetools ,com are the people providing these hacking service.
What he's NOT telling you is the amount of Loan NOT to take out VS how to start a business without a loan. Not going to wait 10 years to save and then start a business. BS advice. He's scared someone else will steel his spot
Who the heck is this guy? Chobani started on a loan, idiot. It’s the fastest growing company in the entire United States. They sell yoghurt. It’s not the matter of how you start. It’s the matter of how you make and sell the product.
Using loans is a financing tool that is useful in many situations. There are also many types of loans, some do not cause a business borrower to be personally liable. Plus many businesses are started with just a small amount of capital and the loan is not that large. There have been many successful business owners who started by using credit cards. Not true to say only a moron starts a business on a loan. I was a business consultant turnaround expert and provided management, marketing, and venture capital financing. Cuban, you are wrong!!!!!!
Very funny he would say that morons would start money with borrowed money. The founders of YouTube started youtube with borrowed money on a credit card and sold YouTube to Google for 1.9 billion in 15 months!!!! That Was a faster fortune than you ever made Cuban...
Don't get a loan you're a moron if you get a loan to start a business says the billionaire who borrowed money to start a business what an arrogant ass hole and I like you Mark Cuban but that was pretty shity thing to say billionaire arrogance
Maybe he is talking lessons the learned the hard way. The advice he is giving is the best case scenario. I started my company with no money down. I just put money into equipment needed or rented equipment until I could afford to buy it.
Over %70 of businesses fail within the first 2 years. Bringing a monthly note into a business that doesn’t have established customers, or product orders means your starting with no guarantee of income, and a monthly payment.
If you went into a business with large amount of work that is promised or contracted. I would feel more comfortable taking a loan. But liquid is the best way to get going.
All of these condescending, self-proclaimed entrepreneurs often enthusiastically opine on the virtues of "hard work", flaunting their business acumen by admonishing against those who apply for loans to start their business, as if you didn't need capital to establish one in the first place (Hint: You do) whilst also disregarding and delegitimizing the barriers to entry, as if all that was needed was pure, unadulterated gumption and mind-numbingly vacuous motivational speaking seminars. They never delve into any rigorous, logistical detail on effective strategies based on statistical data or empirical evidence. It's all just "Bob in Pennsylvania left his 9-5 corporate job and did XYZ after reading my book and now he owns 50 businesses and makes 500 gorillion dollars a year." That's nice, but how about presenting some reliable, reproducible and scientifically rigorous analysis on how to start a business instead of citing one personal anecdote after another?
This advise isn't fair. Mark borrowed $15,000 from his college friend Evan Williams to open his first business, Motleys. He was successful and the college bar became a hit. The lesson is have wealthy friends and family who believe in you. He's a brilliant man but he wont be what he is if he didn't have the network of friends in his early years.
Cyban retained capital to start businesses by simply saving. He literally sacrificed he life. He lived with several guys and ate ketchup sandwiches. Instead of getting in to debt he saved.
Most people want a big pile of money because we are consumers. Cuban has done the work that most people arent willing to do.
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