OptionEase been fortunate enough to have been recognized two years running, in Inc. magazine's Inc. 500|5000 awards which highlighes the fastest growing companies in the U.S.
Last year they asked me to speak on a panel called "From Hell Raising to Capital Raising," which focused on the challenges of fund raising in the current economic backdrop. The good news? There is still plenty capital to be had, but PE's, VC's and private investors are more discriminating than ever about the investments they select.
After more than a few hours of debate with my fellow panelists and numerous questions from entrepreneurs, we distilled ten steps to effective capital raising.
I want to share the first five of these pointers with you, and if you'd like the complete
1. Decide Whether You Want Capital: As you entrepreneurs know, a company is like a baby. You conceived it. You've nurtured it through thick and thin. The decision to own the company or raise capital is the first and most important step in the process. Some liken in to letting a child in the world, but its actually more like putting a child, or a portion of that child, up for adoption. Make sure you are ready to take that leap.
2. Get a Good Fit/Get the Right Investors for Your Business: There is a lot of money out there and people willing to give it to you. You want investors who have something extra to give. Maybe they have important connections or can make key introductions. Can they serve as a mentor? Does their involvment open doors? You are looking for investors who can invigorate your business withindustry experience and success in like businesses.
3. Keep Meticulous Books: A private equity or venture firm, will be much more receptive to investment if you have your
4. Create a Capitalizing Strategy: Good timing is planned. You need to keep track of your industry on a daily basis and an hourly one. No one will invest if your sector is tanking. It's helpful to create a timeline for a succession of investment benchmarks, fleshed out with the administrative tasks to make your capital raising efforts yield, and positioned to take advantage of upturns in the market. The first benchmark is usually a capital infusion.
5. Approach Those You Know: Some often say go to the DDL's, standing for Doctors, Dentists and Lawyers, for investment first. I've also heard entrepreneurs jokingly use the acronym of FFF's, for Family, Friends and Fools. At any rate, it is wise to approach those you know best first, both in the hopes of procuring capital but also running through your presentation at plan. One thing to keep in mind is pitch those nearest and dearest to you, exactly as you would an investor you didn't know.
If you are interested in the complete white paper, with these steps further drilled down, as well as the remaining five steps to successful fund raising, please email my
-Kim