Why fundraising isn’t so bad.
“An investment in knowledge pays the best interest.” – Benjamin Franklin
Making money is difficult. If it was easy then we would all be doing it. When it comes to starting a business however, you are often told that you need money to make money. Bit of a mind-fuck but hey, I don’t make the rules.
Most people who start out in the cut-throat world of business have to raise capital somewhere and this is the bit that people HATE. I have had to do this a couple of times and it is incredibly strenuous but there are ways to make this experience a lot easier.
1) Build what you can.
You might be someone starting a clothing line or someone creating a cool iPhone app but the principles remain the same. 9 times out of 10 you will need a prototype of some sort and this is a little tricky if you don’t have the skills to build it.
Lets use the iPhone app as an example. You have this awesome app idea that millions of people are going to download right away and within 18 months you are going to be wiping your ass with $100 bills on Wall Street. Yeah right.
If you walk into an investor’s room with nothing but a cool idea in your head then you are going to leave with their Italian leather shoes 5 inches up your backside. I have made this mistake. Don’t do it.
If you don’t have the technical skills to code an app then find someone who does. Go to universities, meet-ups and conferences. If the idea is good enough and there is enough in it for someone they will join you. Don’t just expect that an investor’s hard earned cash is going to go straight to a design agency. The real value is you and your team so get the right people together and build your core product. Doesn’t have to look pretty. Just make sure that it works on a fundamental level.
If you can’t design then learn. There are loads of tutorials on YouTube for this and it is also pointless to run a business that you are not capable of building yourself to an extent. You don’t have to become a computer scientist overnight but it is so beneficial to understand code when it comes to delegating work. Check out Codecademy.com if you want a free coding crash-course!
2) Crowd funding
Everyone has heard of it. Crowdfunding is an amazing way to raise capital for your ideas and gives entrepreneurs a lifeline that wasn’t around a few years ago. You have all heard of Kickstarter but have you heard of Crowdcube??? These guys offer start-ups a chance to raise capital in exchange for equity on their platform. Unlike other crowd-funding platforms Crowdcube allow people to purchase a share in promising young start-ups and these guys are also FSA regulated (so super legit).
Suddenly you no longer have to pitch to a stern faced investor but rather to your friends, family and your target market. This isn’t a guaranteed way of raising cash however and it can be difficult to raise the full amount if you are not carefully prepared. Crowdcube also take a chunk out of the final amount so make sure to factor this into your fundraising before you launch your campaign. I would advise you to get personal contacts investing in your campaign right at the start so you can build some good momentum and convince others that your idea has legs. Can be as little as £10 so no excuse for not getting some initial investors.
If you don’t ask you don’t get. Simple as that. It pains me to see so many young and enthusiastic entrepreneurs not networking properly. There are countless FREE ways to put yourself out there and with social media there is no excuse! Use LinkedIn to connect with like-minded people. Doesn’t matter if you don’t know them. There are so many barriers out there that it makes sense to skip a few if you can. No one likes a spammer though. Make sure that you give as much as you take and that way you can build a powerful community around yourself.
Finding the right investor is crucial and if crowd-funding or traditional investors don’t bite then ask yourself why. Don’t waste your time writing a million page business plan if you don’t have a basic version of your product already. Concentrate on building traction, building your product and building a good team.
Build goddamn it build.
“The stock market is filled with individuals who know the price of everything, but the value of nothing.” – Phillip Fisher