“Step 1: We find the worst play ever written. Step 2: I raise a million bucks. Lots of little old ladies out there. Step 3: You go back to work on the books; one for the government and one for us. Step 4: We open on Broadway and before you can say Step Five… Step 5: We close on Broadway, take our million, and fly to Rio.”
Paraphrase of dialogue from The Producers by Mel Brooks
Okay, so you don’t exactly subscribe to Max Bialystock’s approach to raising funds. Most of you do not start out counting on failure to succeed. But, based upon some of the approaches I have seen, it may be helpful to compare and contrast what you are proposing versus what Max is doing; perhaps there is a hidden lesson there.
Everyone looking for financing wants the five steps to follow to achieve success. I wish I had them, but this is one of the hardest things to do in business and, in 40 years, I have not found the secret formula. However, I can offer five points to consider but they will all take some time and hard work. (If it was easy, the success rate would be so much higher.)
- Prepare a pitch deck that is based on a true business model. If you need help, you can refer to our website. The good news is it will tell you exactly what should be in the deck; the bad news is you need to provide the content.
- Invest some of your money. Investors are not interested in helping someone with no “skin in the game.” They want to know that you are serious and have something to lose if you do not succeed. Fear is a great motivator.
- Get friends and family to invest. If the people who know you can’t be convinced, how are you supposed to win over strangers? They don’t need to mortgage their homes; they just need to demonstrate commitment.
- Communicate and refine your plan. Talk to advisors, friends and your network. See what they like and don’t like about your plan. And don’t force the issue; don’t let them feel bad if they are not thrilled and would like to tell you so. Make the feedback process easy and use what they say to consider modifications.
- Target your investors. Understand what they want and how you match up. If you are pre revenue and looking for seed money, friends and family and angels are the place to go, not venture capital funds. Use your network to get to the right people. A few good targeted meetings are much better than dozens of ones that end “don’t call us; we’ll call you.”
So, nothing magical here and no guarantees. But, like everything else that is worth pursuing, it is a process. Don’t let it control you.