After 8 deals and $13m raised in 18 months, I condensed my top ten tips to five essentials for successfully raising capital. I continue to learn new things on every deal but this is the best of the best so far. I have had experiences and conversations with operators, sponsors, other capital raisers as well as folks interested in learning from me.
If you can master the art and skill of raising capital, you have a big advantage. It’s one of the top 3 skills in demand in this highly competitive and increasingly complex world according to Cal Newport in his book Deep Work that I blogged about in my last post (below link).
Everyone seems to need capital to grow. Startups, businesses, communities, non profits, you name it. Even companies I’ve talked with that have a ton of experiences and rich capital sources are interested in talking with me because at the end of the day, it’s just human nature to grow. A small firm can also negotiate better win / win terms from the operator’s standpoint versus wall street private equity that often may negotiate less than favorable terms with them.
Companies either want to grow bigger, faster, or take advantage of opportunities that often come in bunches instead of a systematic cadence. Lack of capital stops ideas, companies and people from growing. If you focus on this one skill you will have folks wanting to partner with you in a variety of areas. Your goal will be to stay focused, establish key relationships with very experienced operators, build your reputation and network of investors by honing your craft and providing them with sound and logical opportunities and taking care of that investor base. So, here is my top 5 list to get you going.
1) Partner with experts
– Increases your experience and credibility faster
– You will be leveraging a great market / deal and team
– Your learning and development accelerates
– Your brand becomes more known and credible
2) Be Yourself / Authentic
– focus on education with investors
– Don’t sell or appear needy > passion / swag in the right balance
– Being knowledgeable increases confidence
– Keep the message logical / simple
– Prepare for investor questions: review my blog link below on 25 FAQs
3) Play to your strengths
– Analyze your network
– Focus on getting stronger in the areas of your strengths
– Don’t waste time in areas that aren’t working
– Bonus: Read Strengthsfinder 2.0 (Tom Rath)
– Return customers and referrals are 85% of my business now – gets easier
4) Raise min 25% more than you need
– Life happens during the 6 -8 weeks raise process
– Don’t be surprised > be mature / empathetic
– Focus on building that long-term relationship – so they are ready next time
– Big commits / take half and put rest on backup
– Demand and interest increases when folks are put on backup
5) Develop a thought leadership platform for long term success
– Building your brand
– Create good content for free
– Focus on educating others
– Ideas: Blogging, Podcast interviews, newsletters, special reports, website, forums
– Most of my new leads today come from my thought leadership platform