Startups looking for money are going about it all wrong. They are chasing the money, instead of making the money chase them. This article is about how to effectively secure funding.
Why should you listen to me?
I have spent almost three decades in the capital markets. I spent the early days of my career on Wall Street, as an Investment Banker. Now I spend my time solving complex financing problems for organizations of all stages. In all this time, I have seen what goes well and what goes wrong.
While on Wall Street, more often than not, I was the person that put a company in play. What does that mean? It means I would seek them out to take them public.
How did I find them?
I actively researched, participated in industry related functions and had a great relationship with Civic Leaders. If you are doing something well, people will talk. Once a company came on my radar I quickly rated them based on their power:
- Hustle & Grit: As I learned about their story and all of the obstacles they overcame and struggles they endured, this made me want them more. That never die, can’t lose attitude cannot be taught.
- Management Team: How strong are they? Can they handle that type of next level success?
- Financials: How clean do they keep their books. This is an indication of how disciplined and well they will manage my money.
How do you leverage your power? Learn the rules, then play to win!
The rules of the game now are Fear & Greed. Intensify an investors fear of losing out. Satiate their greed factor.
Understanding your power comes down to creating leverage. Nothing better than someone wrote you a check to create leverage! It also can be pre-orders, letter(s) of intent, user base, email list, etc. That’s how you will show your problem-solving creativity and that there is a need someone is willing to pay for.
“We don’t care about your product, we care that customers like your products.” Dave McClure, SF based angel investor
Be directionally right:
To be noticed, you need to do something that brings value today but also tomorrow. Too often, founders are in panic mode, trying anything they think will give them traction. Shiny object syndrome! You may not have all the answers but you need to have a direction and understand the actions you must intentionally take to move your needle and stay relevant.
Build a team:
Not having a solid team in place can kill or stall your startup without you even noticing it. Are your skill sets complementary? What is the level of your entrepreneurial sophistication? When resources are limited, outsource to supplement the core team in place.
So get to work! Hustle, strive, gain traction and you will make noise and get noticed. Everyone from banks to investors are looking to put money on the street in this zero yield economy. Prove why you are worthy and they will find and chase you. This is you understanding and harnessing your power (LEVERAGE). The money WILL chase you!
André Wilson is Managing Partner & Funding Maverick at Altima Business Solutions. Altima Business Solutions brings expertise, skills, talent and resources to ensure businesses achieve next level exponentially.