More times
than I recall, entrepreneurs make contact and the first topic is how they can
get funding. The same goes for some
institutions. In fact, I even got
someone on Twitter send me note indicating that they were seeking an Angel
Investor. This makes me wonder what these people are thinking.
I expect to
walk down the streets of New York, Miami, and San Francisco and get accosted by
people wanting money to eat. These
people do not know me. I understand and sympathize with their plight. They have developed a life style that causes
them to need money for food. They have
nothing to sell, no idea of ever speaking to me again, they are willing to hit
up the next person going by and are usually looking for a few dollars. Well, except for the person I see in midtown NYC
that always asks for a spare $100 dollar bill.
At least he is enterprising and makes me smile!
When you ask
someone for an investment, you are not begging for money like a street
urchin! You are seeking a business
relationship that will bring a person into the company. They may even require a Board seat. It is beyond me as to why some entrepreneurs
assume the process of seeking funding does not require building a relationship
or doing the required work to develop their business. To top it off, some of them are so bad that taking
a first meeting is a waste of time. It
only makes things worse when you provide contacts that may be helpful and you
get a call months later asking for the info again because you lost it. That does not make you appear like a viable
CEO or a leader. Why invest with this
person? By the way, a person’s time is
an investment too.
Most people worked
hard to obtain what money they have.
They are not ATM machines and they have personalities and feelings. The act of asking for funds or a partnership goes
hand in hand with developing a trusting relationship. Recently, I saw a question in Quora wanting
to know why a particular VC would not take a meeting with a tech company; “ How about they were not interested!” There must be a desire for a financial person
to want to invest in what you have. This
comes from learning about you, your company, your technology and seeing how it
fits in their investment strategy. The
investor has a desire to increase the value of their fund by strategic
investing. If you are not a fit, it can
be for a host of reasons.
Simply because
you started a company does not guarantee that you will ever find the funds to
run it. You have to work smart and hard. Maybe the money will come your way if you do
work hard. As an interesting note, I spoke
with a few institutions that want lectures on finding money. Great thought but it is the last topic to address
for a startup, not the first. The
planning, construct of the company, the markets and many other topics should
come first. How can someone ever
seriously consider giving funds to a person that has nothing to sell?
Every university
faculty knows how to find grant funding.
This is possible in startups and that even requires a lot of
preparation. When most individuals
invest their own funds, they hopefully spend significant time understanding the
investment. Not doing this creates too
much risk for that investment.
Summary:
If you just started a company, do your work. Then approach possible investors. Why blow your chances with real investors due
to complete lack of preparation. In a sense,
it is like the saying, “if you do the
crime, you need to do the time.” Stop
thinking people owe you and start thinking I have to work harder every day to
do the right things. If I do, maybe they
will invest in me!
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