Raising Capital
Why?
When it comes to raising capital, it is essential to have a true sense of the value add aspect of the relationship. In a situation where you’re raising capital for a business model, you’re likely exchanging the capital for equity, where certain ‘promises’ are made by you, the requestor. To avoid legalities and pursuance of the assets you’ve then transmuted the capital into, you must stay true to your promises. So what value are we adding?
A definitive thesis on what we plan on using the capital for.
Why would this be a value add? Because you’re leveraging your skillset, your research, and your time, that already invested and that which will post raise.
A definitive horizon on return of capital to the investor(s)
This includes projected returns (copy of model(s)) and your benefits from the deal, hurdles, etc.
A structured, well thought out business plan that is clear and concise.
Are you working toward an exit in x years? be thorough on what your plans are in all facets. What will you do if x happens?
Sanctity
If striving for a major raise in the real estate sector or any field where you’re dealing with investors of accreditation, their blessings to your business are your sanctity. The least you can do in this space is provide the same energy in return. Whether you’re providing investor updates, K-1s, or even bad news (which can be commonplace in current market conditions), communicating with clarity and inspiring sanctity in conversation will surely retain the origin of emotions, as well as logic, that fed the decision they made to place their capital with you.
With ideas comes headwinds, drop your sails and row
adding as much momentum as you can to your boat.
we all have our own devices to catch currents and ensure we have moats to protect us from those who attempt to inspire any loss of hope. What comes with the sea are many things unknown, the one truth is that there are creatures below that will feast if you’re caught by a boom swing and left to float. To wrap up before a short concluding paragraph, don’t get thrown from your boat by your boat, nor let the challenges of the sea capsize thee. No one said the ocean was easy and if you believe lives a beach, you can continue to stay planted in the sand. The analogies provided are meant to stand as a testament to not being your own worst enemy day in and day out. Some days we might find an island with fresh coconut water and fruit, some days we’ll be clenching to our mast praying the brutal waves retract. Either way, it’s still us that has to go through all that, with a crew or without, you have to keep your hull strong and your rudder stern. You may find your beach one day but then you gotta carry the boat and the logs. Stay hard.
Capital raise finale.
A very unexciting title size for the final paragraph but that’s simply because I feel I’m not providing you enough value. I’m no expert in capital raising but I can tell you, it’s no easy feat for various reasons. Before anything, you must prepare prepare prepare and you have to get out of the way of doubting yourself, first and foremost. You cannot move any further without preparation and confidence. Second, you must find a way to get in contact with people who you can ask for money. There’s various ways of doing this, your best route(s) would be utilizing a company like listsource.com and making sure you’re adjusting filters to fit your criteria (in theory, I’d filter for non-owner occupied / commercial $1M+ as they are likely to be accredited). Finally, ask for the money. Make sure you’re prepared and your presentation is finalized before asking for that of course, frame the conversation in a way that leaves no surprises to the investor and leaves them in a state of sanctity when providing you with capital. Keep in mind, in this relationship, you’re adding value by offering someone to give you money in exchange for more money, for the both of you. It’s a simple psychology you can approach any capital rise with. In exchange for their money, we both make money. We add value to both of our lives. You to theirs and so on, creating equity multiples isn’t as fun if you’re not too building relationship multiples.
Disclaimer: Raising capital is not for the weak, alignment and authority over spirit body mind are critical in achieving uncapped results. Whether you raise $50k or $500M, you have to have an alignment before you go seeking to have others align with you. You may get told no 1,000 times by family, friends, strangers. This does not constitute the idea as poor or define your dreams as unrealistic, it could mean you may have to go back and assess how you’re approaching the raise and fine tune some aspects sure, but you can’t let your boat capsize. Additionally, seek professional assistance before raising capital. Make sure you have the proper organizational structures in place, agreements in place, your due diligence is critical to the long term success of your business plan / thesis playing out to it’s full potential. None of this is any advise, but my advice, don’t settle for less than your ultimate potential / personal legend.