Under the new terms the bank would no longer be able to provide the funds for raw materials to the company (Tiku, 2009). His partnership with the bank was in good standing so the change came as a surprise. At this time he was urged to cease the development of this new technology and concentrate on the products that were selling as he still have to pay for inventory that was expected by his customers. At this time he was in need of funds and was determined to retrieve those funds in order to make his idea a reality. When a new business venture is borrowing capital it is important to make sure it has credit worthiness, a strong business plan, an established business history, and a hands on owner (Umberger, 2014). Semcken has an established credit history and he is credit worthy. He has been dealing with his bank for more than three years and has been in good standing. The bank changing its terms had nothing to do with him or his organization. His plan to go around the financial institutions and replace the 2.5 million line of credit was in effect soon after bringing his board up to speed. He then met with 15 different banks in order to secure the loan but was unsuccessful (Tiku 2009). Though his credit worthiness was not in question, it was a hard time for the financial world at this time. Semcken did not give up after this failed …show more content…
Semcken was still in need of funds. Having an established business history would work in his favor. He decided to make an offer for every $100,000 loan he guaranteed the investors would get warranted for 30,000 shares at $3 apiece (Hatten, 2006). This was not a big gamble for investors. Able Planet has a well established business history. In the pursuit of the 2.5 million in capital that was lost due to the bank changing terms, Semcken had raised a large percentage of it with hard work and quality products. This showed potential investors that they were working with a company that is well managed and can work against the odds. Over 12 different investors were intrigued by this offer and jumped on the chance to be apart of this venture. This proposal may have been more difficult without the proven track