Magic and the Money Thing

So I think it's time for a little background, as I'm working up to chronicling the current state of my bookstore efforts.

Most of the folks I know who have opened up independent bookstores in the last 10 years or so (it may have been different in, say, the 1970s), have had one of two things:

1) a mortgage
2) a well-off relative or friend.

These are traditional and time-honored means of securing capital for an independent business, especially one as high-risk as a bookstore (it also works with restaurants, bars, and other retail businesses).

I have neither of those things.

What I've got is starry eyes, a passion for bookselling, and eight years of experience, which I've purposefully used to the best of my ability to gain the skills I think I'll need to run a great store. And for a long time, I thought that this experience would attract to me the kind of investor who might stand in for a well-off relative, and be willing to put a big (really big) chunk of money into a startup business on the strength of my capabilities alone. I also expected this person to be satisfied with an eventual financial return and the good they were doing for the Brooklyn community, and not take any interest in the day-to-day operations of the business, which would be my domain. Especially after winning the PowerUp! competition, I was certain it was only a matter of time before someone stepped forward to help me take the next step.

The ALP calls this imaginary investor "the magical millionaire."

Clearly, they have not materialized.

This non-happening has, from time to time, made me a little depressed. Why, in a world where people are always investing in crazy ideas, couldn't just one person invest in my seemingly-crazy-but-actually-totally-solid idea? Why couldn't I just find a grant or even a low-interest loan or SOMETHING that would make it easy for me to make my vision happen? Why couldn't I just be born rich?

But when I stop saying "POOR ME!" and my thoughts clear, it's fairly obvious that I need to let go of the magical millionaire, and try something else.

That's where I am now.

Anyone who is going to put money into my bookstore is going to either want some control of/involvement in the business, or the fulfillable promise of a reasonable financial return. I need to figure out how I can give them what they want, while still getting what I want.

Instead of hoping for some goodwill angel investor type, I am now preparing to formally solicit investors (or lenders). The Fort Greene Association is willing to help to connect me with some likely folks. So I'm putting together a prospectus, including my business plan and investment terms. These will include options for loans, payable by promissory note, or equity investments, which will give investors a share (though never a majority share) of the business, and thus its profits.

I spent this morning with a super nice lawyer in Dyker Heights, talking about how to calculate what interest to offer on a loan like this, and how to figure out the value of the business in order to "sell" portions of it to an investor. It's all fascinating stuff, though I'm a bit slow at it (English major, you know -- this math stuff is not my forte. Though I did get an A in AP Calculus, so just skip the blonde jokes.)

In any case, what this means for the bookstore is that since I'm looking at a formal investment process -- or a longer-term negotiation over a partnership, which is another option -- the bookstore isn't likely to get built and open its doors by this fall. Instead, I'm looking at early spring. Give me a few months to connect with investors, a few months to find and build out the space. And even that is dependent on whether I can in fact find folks willing to plunk even small chunks of money into a business with the profit-to-startup costs ratio of a bookstore (and looking at it this morning, I realized it's not super pretty for several years.)



On the other hand, I've already had three good friends approach me, unsolicited, and tell me that they want to put a chunk of their money into the store. They told me to name the terms -- they just think the bookstore is a brilliant idea, and trust that I can make it happen. Their investments alone only get me a few more yards down the track toward my goal, but that's a lot further than I was before.

And a number of people have already "invested" in Stimulating Reading, plunking down your stimulus check in exchange for a t-shirt, a bag, or some swag from my personal library (and you will get it, I promise!) These are even smaller amounts, but they're basically donations, based on the strength of what Andy Laties calls "social capital" -- you all just think I can do it. I'm hoping there's even more out there, as the checks flow in and folks decide that making a bookstore happen is one way to really boost the economy.


So there's no magical millionaire. But there are already a bunch of ordinary folks willing to get in on my bookstore dream. And I think -- and the FGA thinks -- there will be more.

Instead of a wealthy individual, a rich community. That's pretty magical to me.