Getting People To Invest In Your Company
I just got back to Vancouver from Red Deer, Alberta. It was a good trip, we talked to a lot of people and one of
the meetings that we set up prior to going on this trip was with a potential investor. That got me to thinking about
how many people try to raise investment capital or would like to have people invest in their company but simply
don't know where to start. So I thought I could give you some of my experience.
Now I'm not going to pretend to be an expert on this because there is a lot of different ways to raise investment
capital. There are a lot of strategies and there are a lot of different types of people who invest in a lot of different
things. So I'm simply just sharing my experience and my point of view.
When we started this company we had several investors come on board because we needed to take time to develop
our delivery. It takes a certain amount of time to meet with clients and get cash flow and those investors stepped
up for us to fund us operating our company for the first several months.
I actually found it was easier to raise investment capital in that first year then the second year. Why? Because it's
a new product, it's a new company, people are excited about it. Once you get into the second year now it is a lot
more like work so it's a little more difficult to bring that same excitement. You have to start showing value in the
second year and show how much revenue you are generating. You need to show how many new customers you
have. Show is you are you able to keep the customers you were able to get in the beginning.
Things like that start to really rise up and the delivery starts to get more complicated. So two things you have to do
when you're raising investment capital in the second year is stay positive and show what your company has done
well… be excited about it. The second thing is be very honest about your struggles and more importantly show how
you are taking care of those struggles and the strategies you're putting in place to overcome them.
Now I want to go over a couple things (rules you might say) that I've heard for raising invests. One of the things is
don't raise money from family, which is frankly a myth. If it wasn't for some family members helping by investing in
our company, we would be in a completely different situation. So if you have a good idea and you're being honest
and being straightforward there should be no fear in asking family members who can afford it. Don't drain their
bank account for your company but if they can afford it and if there's an opportunity there don't be afraid to ask.
Secondly, don't sell yourself short. If you've got an idea the worst thing that the investor can say is no. Now we've
had investors that are small they don't have a lot of money. We’ve talked to investors that have millions and millions
of dollars. DO NOT ever sell your company short. If you’ve got an idea and you've got a good product be very very
forthright about how good it is and the potential you see. They will sense that.
Raising investment capital is not putting your hand out. It's not a donation. You have to know what the real value
for the investor is. Be honest about every detail but if you know the value and they can sense it, there are a lot
more likely to invest. So don't sell yourself short, be straightforward, and be excited. Because if you're doing
something that you're not excited about, you're probably doing the wrong thing.
Lastly, I would say, know the type of investors you're talking to. Family invests for different reasons, friends invest
for different these reasons, value investors invest for different reasons. Value investors are looking for what your
company is generating, friend might just believe in you, family might just want to help you.
So know why and don't be sidetracked. You don't want to talk to a value investor and try to get them to believe in
you… give them value. You don't want to be too quick to go to family and show all the numbers and all the data.
It gets them sidetracked from the reason they're investing with you… because they are your family they want to
support you. The same for friends who believe in what you're doing, they have seen how hard you work, or they
have seen the passion you have for the product.
I'm not a master, our company is still in the process of raising investment capital but these are the thoughts that
I've had. These are things I've experienced and I enjoy sharing them. I would love to get some feedback and if
you have ideas on how to raise investment capital believe me I'm very open to hearing them.
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