Shelf corporations: A new way to fund your startup

Are you a budding entrepreneur? Are you striving to be one? Do you have a phenomenal idea but you are clueless about how to go further? Check out this article dealing with the significance of a shelf corporation and how it can aid you in your journey to create something as extraordinary as IKEA, as fascinating as Amazon, as exciting as Tesla, and as futuristic as Space X…

Entrepreneurship – A salty cup of tea

Entrepreneurship has become more of a phenomenon in the past few years. More people are engaging in this dynamic and incredibly unpredictable field than ever before. Founding a company, beginning a start-up is undoubtedly exciting, thrilling, and maddening. But entrepreneurship is not all sunshine and roses. One would be a Pangloss to believe that the overwhelming problems and complications that one encounters in the journey are anything but rosy and exciting for an entrepreneur. And one of the main Gordion knots that one’s required to deal with is the aspect of financing the venture, the money to begin a company, economic resources to give life to the idea that has just germinated in the headspace and is dying to grow into a massive self-sustaining tree. But there is a solution for that, aged corporation.

Fund me, will you!

As we know, funding itself can be really hard to find. As an entrepreneur, primarily and primordially, you are required to get people to commit to funding your idea. A skewed percentage of people are able to access capital from angel investors, as it is a hyper-competitive arena where everyone is as committed as highly committed. Hordes of perceptive people with unimaginably unique and novel ideas fail to attract interest from venture capitalists, not always because their ideas aren’t worthy of consideration. But because those venture capitalists and angel investors aren’t willing to lose money by putting their bets on intentions and ideas alone. They need something more concrete and solid that many people in the initial stages of the development of their product or service aren’t able to exhibit due to the lack of funding. As Kevin O’Leary has said, “Had Elon Musk come to Shark Tank and asked me to invest in Tesla, I’d have sure shot said no.” But we all are aware of how Tesla is fairing today.

So what are the options that one’s left with to fund one’s venture when nothing reliable seems to be an option worth striving for? Yes, you read the title right, shelf corporation also called the aged corporation.

Shelf Corporations

A shelf corporation is a company that has been registered already but possesses no records of conducting business, which is why it does not have any assets and liabilities attached to it. As the name suggests, it’s a company lying on the shelf, possibly for someone to pick it up! Of course, for a price.

Apart from being a dependable solution concerning funding a venture, shelf corporations can help entrepreneurs who cannot afford to invest a lot of time in the red-tapism involved in setting up companies and the time-consuming procedure to register a company.

Buying a shelf corporation, also called a blank check company, allows you to get access to the finances you require to grow your business. You get an opportunity to build your credit with time and become eligible for higher loan amounts.

A little bit of care and caution, and it pays handsomely

Once you buy an aged corporation and you are ready in almost all departments to carry out business, one of the major factors that contribute to making your business attractive for the investors and venture capitalists to invest in is the fact that now your business is not as new as it really is. The moment you buy a shelf corporation, your business becomes as old as the shelf company you buy. This purchase makes your business look authentic and makes a statement that you have been in the business for some time now. That’s why one of the precautions one must take before purchasing a shelf corporation is to ensure one’s double sure about choosing the appropriate age for it, as per the finances that one needs.

They can lend you as well!

Once you have a company that on paper is old enough to have a credible credit rating, you become eligible to access loan amounts. And if the credit rating is commendable, you are able to access higher loan amounts.

Paydex Score and Shelf Corporation

But one should be aware of the credit rating score called Paydex. Paydex is a term used for a numerical score granted to businesses as a credit score rating their expeditiousness in paying creditors. It’s particularly used for commercial organizations.

Therefore, one must choose a shelf corporation with a Paydex score of 80 or above so that lenders can see that one’s entity has a consistent credit history. A shelf company with an 80 Paydex score signifies that the corporation pays its dues in time. Also, as Paydex is a terminology used by one of the most well-regarded data and analytics company called Dun and

Bradstreet, a great Paydex score means that the entity has been well recognized as a responsible corporate by Dun and Bradstreet.

All in all, a shelf corporation can be a fascinatingly convenient way to start off well and scale up accordingly while focusing on the core of one’s venture and carve it out well.