6 Fundraising Tips for Your New Business

Fundraising-word-on-pin-board-RS-770

Every emergent business needs a source of capital. Regardless of the nature of your business idea, this capital has to come from somewhere. Fortunately, there are plenty of places to find funding for an early-stage company.

For guidance specific to your company’s needs and growth trajectory, you’ll of course want to speak with a seasoned business coach, accountant or financial advisor before proceeding. However, these six tips to generate or secure funding for your nascent company are broadly applicable and can definitely give you a leg up regardless of your near-term objectives and overarching vision.

1. Tap Liquid Savings

Although roughly half of Americans live paycheck to paycheck, the other half have at least some financial breathing room.

If you’re part of the second camp, look to your personal savings as a source of startup financing. This is a great way to show future investors that you believe in your business idea. The fact that you’ve personally invested in your company before seeking external funding sources is a vote of confidence for many angel investors and venture capitalists.

2. Stay Lean for Longer

As an entrepreneur, it’s always in your best interest to carefully watch the bottom line. Successful business owners use every available tactic to control costs and remain lean, stretching their startup resources farther.

“As a young entrepreneur, staying lean was very important to me,” says entrepreneur George Otte. “My approach to business allowed me to grow on my own terms and strengthened my enterprise during its critical early years.”

By following in Otte’s footsteps, you can wait longer to seek external funding. When the time finally does come to pitch investors on your idea, you’ll be in a stronger financial position.

3. Borrow Against Home or Retirement Equity

If you have substantial equity in your home or a sizable balance in a tax-advantaged retirement account, you can borrow startup capital at lower rates than those afforded by unsecured loans, credit cards, and traditional lenders such as banks.

Contrary to popular belief, borrowing from a retirement account is possible while preserving your scheme’s tax advantages.

“There are provisions in the Employee Retirement Income Security Act and IRS tax codes that enable people to invest retirement savings in a business if they are active employees in the company,” says business expert Erik Sherman.

In other words, as long as you play a day to day role in your startup’s operations, you can borrow from your retirement savings without incurring a tax penalty.

4. Seek Support from Your Friends and Family

Friends and family members are great sources of “patient capital.” In other words, they may be willing to wait years or even decades to realize returns on their investments. “Patient capital” is the first source of external funding sought by many entrepreneurs.

5. Run a Crowdfunding Campaign

If you have a novel idea that you think consumers will really love, build a crowdfunding campaign around it. Crowdfunding allows you to raise money at relatively low cost without giving away equity in your company or paying interest over time.

6. Apply for Grants and Prizes

No matter what your company does, it’s likely eligible for grants from industry associations, local government agencies, or entrepreneur-oriented nonprofits. It might also be a worthy contestant in startup competitions that promise cash prizes to winners and runners-up. Even if you don’t win, you’ll learn a lot from mentors and fellow contestants.

3 Advantages of a Line of Credit for Your Small Business

pexels-photo-416405

If you have a small business, then you understand how important it is to have the right cash flow. Your available cash flow can make or break your business and can spell success or disaster – if you don’t have the necessary cash on hand, for instance, how can you pay your bills and take care of your daily operational requirements? Even more than this, how can you grab opportunities to make your business grow and expand?

The problem is that many small business owners with cash flow issues end up turning to their personal savings or borrowing from friends and family just to keep their business going, which isn’t the best way to deal with it.

Fortunately, there are ways you can get the proper funding for your business – one of which is to get a line of credit. Here are three advantages of a line of credit for your small business.

1) You have cash – but you still have full control

With a line of credit, your business will have the cash it needs to function, operate, and even expand. What makes a line of credit more advantageous, however, is that you remain in full control of your business operations. This is different from acquiring investors, where you may have to give up a certain amount of control. With a line of credit, you have access to cash, but you don’t have to bother about the whims or demands of investors.  

2) Better budgeting

A line of credit is also better for your business when it comes to budgeting. Unlike a business loan where you are often presented with a lump sum, a line of credit gives you money when you need it, as you need it.

The flexibility of a line of credit is advantageous to your business since it allows you to budget your finances more effectively.

3) Build your credit score

As a small business, it’s important for you to have a good credit rating. A good credit rating will make it easier for you to acquire loans and credit in the future. With a line of credit, you can achieve a more positive credit score (provided you pay off your debt, of course), which you can certainly make use of if you would like to get bigger loans for future growth and expansion.

If you want to do whatever it takes to make your small business grow and succeed, you need all the help you can get. Getting a line of credit is one sure way of injecting much-needed lifeblood into your business, but remember that it’s still a debt to be paid, and it’s always good to manage it wisely as well.

The Black Mark: Personal Finance Problems Which Could Stop Your Startup

pexels-photo-313690

For the most, it’s essential to keep your personal life and your startup separate. Business and pleasure don’t mix well. A scandal at this stage could spell curtains. So, the chances are that you keep your personal life out of the office. It’s usually the best route to take.

But, such separation life isn’t always possible. Entrepreneurs can’t escape the fact that who they are is linked to what they’re doing. Your personal background could have a massive impact on your success or lack thereof. For example, a bad personal meeting with a future business associate could scupper a deal. Equally, a bad credit rating could halt progress before you even get going. And, that’s what we’re going to look at here.

You may assume that personal finances wouldn’t have anything to do with your enterprise. But, think again. Here’s how your own money problems could cost your startup.

Failure to get a loan/backing

Let’s not beat around the bush; no startup can get off the ground without money. You’ll have a hard time convincing anyone your business is worth investing in if you’re drowning in debt yourself. Not to mention that yet another loan could lead to more trouble. Even if you manage to get a loan against the business instead of your name, it’s unlikely you’ll meet the repayments. As such, your company could end up filing for bankruptcy before you even start.

Lack of faith from the business world

Nothing stays secret for long in the business world. If you’re drowning in debt, the businesses in your circle will soon know about it. And, once they do, you’ll have a hard time getting a deal from any of them. Why would they trade with an entrepreneur who can’t handle money? That would be financial suicide. If your company goes bust, they lose money. It’s as simple as that. Instead, you’ll find that all those businesses turn their backs on you. And, when they do, you’ll soon find yourself in trouble.

Is there anything you can do?

Luckily, there’s plenty you can do to get the situation under control. You want to develop a way to clear your debts as soon as possible. The faster you’re clear, the sooner you can enter the business world on stable footing. Many would choose to turn to debt consolidation to tackle the issue swiftly. But, that might not be the best plan for you. After all, every penny counts when you’re starting out. You can’t afford insane interest rates right now. Instead, consider the debt relief programs offered by companies like the Bank of America. This way, you can develop a plan to clear debts in a realistic time frame.

The Black Mark: Personal Finance Problems Which Could Stop Your Startup

For the most, it’s essential to keep your personal life and your startup separate. Business and pleasure don’t mix well. A scandal at this stage could spell curtains. So, the chances are that you keep your personal life out of the office. It’s usually the best route to take.

But, such separation life isn’t always possible. Entrepreneurs can’t escape the fact that who they are is linked to what they’re doing. Your personal background could have a massive impact on your success or lack thereof. For example, a bad personal meeting with a future business associate could scupper a deal. Equally, a bad credit rating could halt progress before you even get going. And, that’s what we’re going to look at here.

You may assume that personal finances wouldn’t have anything to do with your enterprise. But, think again. Here’s how your own money problems could cost your startup.

Failure to get a loan/backing

Let’s not beat around the bush; no startup can get off the ground without money. You’ll have a hard time convincing anyone your business is worth investing in if you’re drowning in debt yourself. Not to mention that yet another loan could lead to more trouble. Even if you manage to get a loan against the business instead of your name, it’s unlikely you’ll meet the repayments. As such, your company could end up filing for bankruptcy before you even start.

Lack of faith from the business world

Nothing stays secret for long in the business world. If you’re drowning in debt, the businesses in your circle will soon know about it. And, once they do, you’ll have a hard time getting a deal from any of them. Why would they trade with an entrepreneur who can’t handle money? That would be financial suicide. If your company goes bust, they lose money. It’s as simple as that. Instead, you’ll find that all those businesses turn their backs on you. And, when they do, you’ll soon find yourself in trouble.

Is there anything you can do?

Luckily, there’s plenty you can do to get the situation under control. You want to develop a way to clear your debts as soon as possible. The faster you’re clear, the sooner you can enter the business world on stable footing. Many would choose to turn to debt consolidation to tackle the issue swiftly. But, that might not be the best plan for you. After all, every penny counts when you’re starting out. You can’t afford insane interest rates right now. Instead, consider the debt relief programs offered by companies like the Bank of America. This way, you can develop a plan to clear debts in a realistic time frame.

It’s also worth being completely open about your situation. Speak about how you’re dealing with the issue. As mentioned above, these things have a way of coming out in the end. So, beat the gossip by sharing your story. You could even become an inspirational figure for other entrepreneurs out there.

Financial Advice For Your New Startup

pexels-photo-572056

Starting a new business, whether it’s by yourself or with a small team of friends and professionals, is no easy task. The number of startups popping up in all manner of industries might be growing exponentially but the number of those startups which achieve success is still relatively low. Many entrepreneurial individuals jump into the business world with their head in the clouds. It’s good to have innovative ideas and to be passionate about turning them into a reality but running a good business depends on you being level-headed and practical.

Don’t throw all your crazy ideas in the bin just yet. You shouldn’t dismiss your creative side, by any means, but you shouldn’t let it dictate your business decisions either. You need to focus on the financial side of running your startup, above all else. Money keeps the wheel of productivity turning. Whilst your sole goal shouldn’t be to make a profit at any cost (given that you most likely want to retain integrity and provide a top-quality service), you should certainly focus on managing your business’ funds sensibly and effectively. Here are some pieces of financial advice for your new startup to help you avoid going under before you’ve even really started.

Keep track of expenditures and income.

This might seem like a lesson from Business 101 but it’s baffling that so many companies make the mistake of overspending. You need to keep track of your profits in weekly roundups, ideally. Think of this in the same way as managing your personal finances (in a sense, these company finances are personal because you own the startup). You need to reflect on the money your startup has earned, take a look at the business plan, and start to make some decisions with regards to planning upcoming expenditures. Your startup still needs to spend money to improve itself; if you’re too afraid to make investments then you’re actually taking a bigger risk by failing to progress your business forward with higher-quality services, more employees, and so on.

Just to reiterate, the most important thing to remember is that your expenditures shouldn’t ever exceed your profits. You wouldn’t spend beyond your means with regards to your personal finances or you’d end up in debt. It’s no different in the business world. Your company’s bank account only runs so deep and if you’re a startup then it probably doesn’t run very deep at all (for the moment, at least). This doesn’t mean you should play things safe because you still need to spend money to make money, as mentioned before. However, keeping track of spending and frequently referring back to the budget is essential if you want to safeguard your startup’s finances.

Use personal funds.

This startup is your creation, isn’t it? Perhaps you co-founded it with some friends but you own a stake in this business. You’re not some worker bee at any old firm. You’re your own boss. And that means you have a real investment and stake in this company. You can’t just jump ship if things look dire. It’s up to you to keep things afloat. That’s why you should be striving to pour as much of your personal funds into the startup as possible during the early days, in order to get things started. You might not be seeing the sales you want just yet because you don’t have a big enough client-base, so the money your startup needs in order to grow has to come from somewhere else.

Of course, you’ve probably quit any 9-5 job you might’ve had because you need to dedicate all your time and effort to this new venture. Perhaps, instead, you could look for other sources of revenue. Investing in property is always a smart and stable way to gain some extra income. You could look into a hdb rental in order to make some money from leasing out properties to other. Investing in property is a great way of ensuring return on investment; people always need places to live. There are other ways to invest, of course, but the goal is to look for low-risk, high-reward opportunities.

Remember that automation is your friend.

Time is money in the business world. When you’re running a startup with only a small team at your disposal, you’re already fighting an uphill battle against all the huge competitors in your respective industry. They can get more done in a shorter space of time and maximize their profit potential. They have a superior financial model, surely? Perhaps not. Digital technology is the slingshot you can use in order to take down Goliath. Rather than wasting your time focusing on administrative tasks and other dull aspects of daily business life that are taking your attention away from the “real” work, you should automate as many tasks as possible; payroll software and many other types of automated services can take a load off your mind. It’ll also free up more time for you and your team to work on creative ideas and talk with your clients. You’ll be able to focus on the money-making side of things rather than basic tasks which need to be completed but don’t need to be done by humans.

Build up that client-base.

Do you still not have many loyal clients? Make that your priority. Sales are everything. Don’t get swamped by all the technicalities of running a business. You’ll be growing and changing all the time, so your startup’s organizational structure will always need to be reworked (new job roles will need to be fulfilled, the budget will need to be revisited, and so on). What you need to focus on today is gaining customers. You need effective marketing and top-quality products or services. It’s important not just to reel in potential customers with an enticing brand but to make sure that the service is great enough for them to return again (and to leave a positive review which captures the attention of other potential customers). You can’t just fake it until you make it. Your startup really needs to be as good as it says it is if you want it to make money and grow.

7 Options To Start a Business With Little or No Money

pexels-photo-164474

Do you have great business ideas that never get past the daydream stage because you have little or no money? A lot of us have been there, but don’t give up just yet! Obviously it would be nice to have a million in the bank, but even if you’re living from paycheck to paycheck or don’t have a job at all, there are still options and techniques to start a business.

Let’s dig a little deeper …

1) Provide a Service

While you might have one grand business idea that does require substantial capital, not all businesses do – especially if you are providing a service. Becoming an online freelancer for example requires next to no startup costs (unless you don’t already have a computer) and you will be paid as you go. Depending on your goals and how you approach freelancing this could be the business for you, but it is also a great way to bide your time, make some extra cash and save, while you work on other business ideas … which brings us to our second point:

2) Research and Plan

Just because you don’t have the funding now doesn’t mean you won’t in the future. If you are serious about starting a business there is nothing stopping you researching the market, drafting a business plan, estimating costs and carrying out other vital research. ll businesses start with research and planning, and some of this can be carried out at home on your PC for free.

3) Saving

So you have no capital right now? Save!Whether that means revising your monthly budget and cutting some outgoings, freelancing (see Provide a Service), selling unwanted items, or doing odd jobs – good old fashioned saving should not be dismissed. Imagine how great you’ll feel when your business is a success and you know you put in all that hard work at the beginning!

4) Sharing and Reducing Costs

At first glance startup and day-to-day business costs might seem overwhelming, but you can get by a lot cheaper when you think outside the box. Do you need to rent office space or can you utilize public facilities, shared work spaces or even your own home? Why pay for a phone line when you can use Skype? Do you need to pay for professional marketing, advertising or other services, or can at least some of this be done yourself?

5) Loans

Most large businesses are not funded solely by the founder’s pocket; they borrow from investors and partners or take out loans on the hope that the business will be a success and make enough to repay them. Someone with a good credit score and a business plan stands a strong chance of getting a business loan from the bank. Others might choose to use a regular personal loan, though this might carry some added risk. If you have bad credit or are between jobs there are still loan options out there that you can use to fund a business. You can learn more on how to get a loan with no job from MatchedLoans.com.

6) Seek Investors and Incubators

If you are particularly confident in your business idea and have thoroughly researched the market and crunched the numbers, you could approach individual and groups of investors who fund startups. Incubators are funding programs designed specifically for startups that come with extra benefits such as expertise, admin services, office space and other support. They might also be sponsored by local colleges or universities.

7) Crowdfunding

Crowdfunding puts you in touch with investors and regular members of the public, and if your idea is something viable you may be able to fund it all the way. Some sites like Fundable are designed specifically for crowdfunding startups. Although you can accept straight-up donations on most platforms, usually you will be required to offer perks in return for a set sum of money. This might vary from a simple thank you or piece of business/product related merchandise, to early access to the product or even pre-ordering of the finished product itself.

Exactly how you set this up is up to you and will depend on your business idea and business model, but you must obviously account for any perks you offer. You must also be enthusiastic and capable of marketing your idea through the crowdfunding platform as people still need to know it exists before substantial capital can be raised.

These are just some of the ways you can get a business going with little to no money. Have your own methods? Let everyone know in the comments or share the article if you found the information useful!

Can Using an Auction House be Beneficial for Start-ups?

5751914ab71ed.image

Auction houses hold many benefits for individuals and big businesses seeking to buy and sell property through this method. The main one of these for those looking to buy is the opportunity to get an absolute bargain, while for sellers it can be a quick way to sell a property. For start-ups, going to an auction house such as through Allsop can be beneficial in many ways, though for certain companies there may be one or two drawbacks as well.

Advantages – Great Value Options

Undoubtedly the main reason many will turn to an auction house is to find a bargain. This can help start-ups looking for affordable property, rather than being lumped with expensive rental or ownership costs. There is also no fixed asking price, which means buyers can secure a property for a lower amount than you would usually have to pay. Plus, once you have made the highest bid there is no chance for it to be remarketed or the seller to accept other offers.

Investment Opportunities

Buying a property at auction doesn’t mean it has to remain your business’ headquarters forever. It could be a temporary base bought for a low price as a business hold up and then sold later on for a profit. This provides your start-up not only with a place to work from but also a good investment. Compared to many other investments, the property market is one which has retained and grown in value, so can be seen as a more stable investment than the likes of shares, currency and others.

Speed

It can be a lengthy process finding, buying or renting office space or a building to use for your business. There are few quicker ways to do this than through an auction, whereby you can be completing on your purchase within 28 days of the hammer falling. The same is true for any businesses hoping to sell property, as the buyer is committed so that the sale becomes as immediate as possible.

Disadvantages

Risk Factor

There is always going to be some element of risk involved with using an auction house to purchase property. You can easily go to one, two, three or more and not find anything that meets your needs. Sometimes it may seem like there is a bargain available but the property could either have hidden issues (such as large repair costs), be in an undesirable location or other factors. Still, it can be worth the risk if you unearth a real bargain.

Obligations

It’s great that the process is so fast, but it does mean that you can rush into things. Once the hammer falls you have an obligation to buy the property. With plenty of research (an auction house should provide all the relevant documents before the auction) then you shouldn’t end up surprised by your purchase. However, elements such as a low price and the competitive environment can encourage some to bid, win and take on the obligations for properties they otherwise do not need.

An auction house can be a great place for start-ups to find a bargain on any property for their usage or as an investment, but it is important to remain careful and aware of any risks.

EP19: Shane Liddel From SmartCrowdfunding On How To Have A Great Campaign

Crowd_Funding_Pitch2crop for post

Download | Subscribe on iTunes | Stitcher

First off CEO of Smart Crowdfunding Shane Liddel explains important factors in having a successful campaign. Then we here a live pitch for the X-Stand, and Monica Selby talks about Nashville Faith and Work Summit.

EP31: Angel Investor Manny Fernandez On Raising Capital & Entrepreneurship

background test

Download | Subscribe on iTunes | Stitcher

San Francisco angel investor of the year Manny Fernandez explains new things happening in the world of equity crowdfunding, why he founded Dreamfunded, and even offers to help startup founders with resources they need to raise capital!

Listen to the podcast then checkout DreamFunded.Com to learn more about new ways to raise capital!

EP 29: Angel Investor Tatyana Gray Explains What Investors Are Looking For

background test

Angel investor Tatyana Gray explains shifts in the investment world, and shares different things that turn off investors to founders and ways to impress them.

Lightning Round Answers:

Crowdfunding Pitch Show EP8: David Wilson Pitches Jamblaster

Crowd_Funding_Pitch2crop for post

Download | Subscribe on iTunes | Stitcher

In this pitch episode David Wilson pitches their amazing new product the Jamblaster, that allows play music with others live in sync remotely, record pro quality audio, broadcast video performances, teach/take online lessons & more! You can even do live Youtube broadcasts with multiple camera angles, all through Jamblaster.

Check out their campaign here after listening to the pitch!

Special Episode: Smart Crowdfunding & Clickable Prototypes

Crowd_Funding_Pitch2crop for post

Download | Subscribe on iTunes | Stitcher

In this special Thanksgiving episode Shane Liddell CEO of Smart Crowdfunding tell his story helping 100’s of startups have successful campaigns, and Kenn Palm, CEO of Pilgrim Consulting talks about entrepreneurship, investing, and how clickable prototypes are essential for tech startups.

3 Things About Raising Capital That Piss Me Off

showme

Raising capital is ridiculously complicated and incredibly frustrating. 

Anyone who has gone through it will tell you this. Heck, investors admit it. Thank you SEC for finally allowing equity crowdfunding. Fingers crossed you won’t over regulate it, and make that insanely complicated as well.

Before going into the 4 things I’m currently annoyed about, let me preface this with the following: I have built 5 companies without a dime of investor capital, been an investor myself, been a vendor for investors, and have personal relationships with quite a few angel investors. I have voiced all of these frustrations on a regular basis to them.

I also don’t want this rant to appear to be from someone who is mad about being turned down for investment. While I’m using personal experiences for examples, I have witnessed these and others happen to quite a few startups. My frustration with this is what led me to invest time and personal capital in several companies over the last 3 years.

Annoyance Number 1 – Needing To Making Up Projected Revenue Numbers

A while back I went on a road show for a venture I was involved in. We had a finished product, revenue, had bootstrapped it well beyond the need for seed capital, and were ready for scale.

We put together a fantastic deck, pitch videos, and the ROI projections were very reasonable. With our revenue model we literally needed .001% of our target market to be a $20 million company with a 75% profit margin. Recurring revenue model, and that .001% equaled about 6,500 customers. So not a massive undertaking to reach the initial goals.

After the first pitch, the head of the investment group pulled me aside and recommended that I increase my revenue projects and said:

Fudge the numbers and make it look ridiculously attractive, it doesn’t matter if you’re lying.

I was marginally stunned about this and thought he was joking. Nope. Dead serious.

Now I was faced with both a business and moral dilemma, do I lie on the front end and hope an investor will bite, while also setting myself up for backlash with unreasonable projections, or do I stick with reality and pray someone will invest.

I went with option 2 and let’s just say it didn’t turn out well. We got to watch companies that needed significantly more capital to get started, had lower profit margins, and had much longer timelines for ROI successfully raise money. All while we weren’t able to close the round.

Annoyance Number 2 –  Not Listening To Your Answers

This one really fired me up.

At the first stop on the road show, a concern was raised when I outlined the industries we wanted to target. Several investors thought we wanted to go after 6 markets simultaneously. I clarified to them that wasn’t the case. We just wanted to showcase that the opportunity of scale was reasonable, and that we were thinking big picture.

However, to avoid that being a roadblock in the future we made pitch modifications to account for it. Both in the deck itself and during the pitch, a very strong caveat was issued that Industry A was the one we were targeting, the others weren’t going to be touched until well down the line.

Come Q&A time after the pitch, the question was asked if we were going to go after all these markets at the same time. Answer again – not anytime soon. Down the road. Only after dominating the first one.

Fast forward to the answer on the ask. No.

Key objection. You guys want to go after to many markets to fast.

(this one ended up being acquired later on – zero capital raised)

Annoyance Number 3 – Ignoring Low Risk Investments & Backing Small Market, Ludicrously Expensive Ones

This example is from a couple of years ago, and I’ve since seen quite a few similar ones.

A technology company I was a consultant for had an incredible opportunity to seize market share. By opportunity I mean a federal regulation had just been issued requiring the target market to buy this type of healthcare software or face a 5% gross revenue penalty. 

84% of the market was currently controlled by 3 companies. Market research had returned 67% of potential customers were looking for alternatives to existing options, a giant list of competitive advantages, and all we were looking for was marketing capital to scale. Just over $1 million of personal capital by the founders had been invested to build, test, and prove market viability.

To generate $50 million a year in recurring revenue they would need to grab 2% market share.

This venture was immediately rebuffed by investors, while a company that needed $47 million and 5 years just to go to market was funded instantly. By instantly I mean commitment was made by multiple investors on the spot.

Now that wasn’t my cause of frustration. There are plenty of great ideas needing that amount of time and capital. What blew my mind was the entire potential market was $100 million. Even more mind boggling was a profit margin of only 20%. Mathematically it would be almost impossible to gain reasonable ROI, and the capital risk was huge.

(never raised of dollar of investment capital and is now doing $6 million a year)

Annoyance Number 4 – Easier To Raise Big Money Than Small

Angel investor or Venture Capitalist, I’ve never understood why you would want to risk larger sums of money than smaller ones. It really doesn’t make sense.

If you only expect 1 in 10 investments to provide ROI, then to me it’s logical to reduce the initial capital outlay, and if need be invest more down the line. That however isn’t how it’s done. Raising $500k is incredibly difficult, but needing several million opens a lot of doors.

As technology advances, outsourcing lowers cost, and ability to market test is growing tremendously. This has led to a reduction in the amount of capital needed to grow a company.

So with this being reality, why aren’t investors increasing the number of smaller gambles, rather than chasing the proverbial unicorns? To mix metaphors, why would you put all your eggs in one basket, when for the same capital risk you could have 10?

On the flip side, if you can’t justify needing huge investment, then you can’t raise it. This circles back around to my earlier annoyance in needing to make up numbers to justify investment.

Annoyance Number 5 – Needing A Full “Team”

CEO. CFO. CMO. CTO. COO. Plus a few other C** roles for good measure and why not add in 5 big name advisers and a few strategic partners.

This seems to be what investors are looking for these days, but if you’re looking for early stage investment capital it’s A) unlikely you’ve been able to secure all of these in anything other than name, and B) there are plenty of resources out there that can service these roles in the short-mid term and significantly reduce the amount of capital needed.

For example, there is a great company called Conserv here in Nashville that can offer you a CFO and accounting services all under one roof. But since they are a third party vendor, and not on your cap table, questions immediately arise about needing to fill that role.

If in the short-mid term you can remove the need for $300-400k in salaries by outsources different services, save equity options for the future, and in reality have access to additional resources for less expense, why is this seen by a lot of investors as a risk, versus a smart use of their money?

Rant Summation

Hopefully this hasn’t been taken as a complete evisceration of investors.

There are plenty of forward thinking investors being very progressive in the risks they take. When it’s their money on the line, it’s ultimately their prerogative in what they invest in and how often. I know this on a very small scale with my investments compared to the “real” investors.

That said, I truly hope these kinds of issues can become mitigated in the future. The need for seed and scale capital is never ending, and the number of people willing to risk entrepreneurship is falling.

Without a significant rise in the number businesses starting and growing to replace the ones shutting down, our economic issues are going to continue to exacerbate.

So to investors reading this, please don’t hate me.

For entrepreneurs needing to raise capital, don’t let this rant cause trepidation.

You must approach entrepreneurship without fear, and be willing to accept rejection without losing your drive to succeed. You will experience ups and downs every day you are a business owner. It’s part of the responsibility.

Now get out there. Take risk. Don’t be afraid of rejection. Live the American Dream. We only have one life to live. Go make the most of it!