Ok, got your attention, raising money is never really “easy”, but it’s significantly less stressful when you follow 3 P’s of raising money. These pillars will give you the foundation to sleep better and find comfort in your capital formation journey.
Patience. Unfortunately most people don’t think about raising capital until they need it. The best time to raise money is when you don’t need it! The average start-up takes 10 months to raise a seed round and entrepreneurial thought leaders suggest entrepreneurs should not consider their capital raising effort a failure until they have been at it for at least 12, if not 18, months (1). Even though I have personally been involved with and witnessed this timeframe at work, it is still astounding to me how long it takes. Understanding the duration of the journey and building the patience and tolerance will increase your odds of success.
Persistence. The president of a company I am close to had a high-profile VC on the top of their get-to-know list. After a series of phone calls, emails and InMails, she finally got a response which included a “thank you for being persistent”. I have had this happen to me personally several times in my career. The stark reality is that the average business person is drowning in communications. If your purpose of getting in touch is valid (not spammy etc.), I have found that the high majority of people appreciate persistence. And if you ever do get a nasty response (which frankly I have really never seen), then that is great too because you can cross them off your list and keep moving!
Process. “Yuck! That is why I am starting my own company” I can hear it now. Bureaucracy is bad, agility is good… I know… I know… However, findings (2) show that even start-ups and small businesses need processes like a big company. Reason? Processes hold people accountable and it is often the founder and executives that need (and benefit the most from) accountability mechanisms. Want to guarantee your fundraising success? Simple. You need to establish a process with accountability mechanisms. Raising capital is just like selling your product or service. You need to target your audience and get efficient and clever at getting in front of them. There are no magic bullets, no “perfect introductions” and nobody that can “do it for you”. Success simply comes from a passionate and persistent DealTeam running a process. That with a touch of patience and you will get the working capital you need to build your company.