The Number 1 Reason Why You Don’t Have Investors Yet – Guaranteed
We have never met but even so I can, by the end of this post, tell you exactly why you do not have your investors locked in yet.
A bold claim right? How the hell can I, some guy sitting in a hotel in Buffalo NY, know anything about you wherever you are right now?
Let me tell you a quick story and by the end, I believe you’ll be much closer to getting your own investors and you’ll understand why I can make that bold claim.
So after starting and growing a couple of businesses, my wife and I decided it was time to go back to Europe. We’d been living in the US for about 8 years and when she became pregnant, we decided we wanted our daughter to grow up where we had.
Arriving back in London I responded to an ad in the Financial Times from the Department of Trade & Industry who wanted to pull a handful of entrepreneurs together to advise the Government on all things entrepreneurial and start-ups.
Despite more than 2000 applicants (I was told later…), I joined the Board of the Small Business Council.
This was a great experience – the amount of access it gave to the Government, to senior Venture Capitalists who were also engaged, to Private Equity folks and the movers and shakers of the business world in both the UK and further afield was breathtaking.
But perhaps the biggest benefit was to influence thinking about what was needed to help other entrepreneurs. It really was a great two or three years on the Small Business Council.
For some reason, despite the fact that I’ve always found finance stuff dry and somewhat boring – I began to realise that one of the biggest reasons why entrepreneurs fail is under-capitalization…in other words, a lack of cash.
So even though I’d been a brand marketing and product launch guy, I decided to focus on really understanding why some entrepreneurs can raise money and grow their business and others fail to get that much needed cash.
Was it based on the strength of the product? Or perhaps the size of the market? Or was it about luck or the school someone went too or was it even about, as Warren Buffet has said, being a member of the lucky sperm club?
Were people getting funded based on who they knew, how kick ass their product is or how much social media networking they’ve done?
So at this point perhaps you are nodding…maybe you are saying “Yes” either out-loud or in your head…I know, before getting the data, these were some of the reasons why I thought people got funded.
In fact, when starting the funding process for my first company – as a recent Harvard Business School grad, I figure it was going to be easy to raise money. Hell, who tough could it be for entrepreneur with the Harvard alumni network behind him right?
If ever there was a case with all the boxes checked which should have made getting investors easy, I was that case.
So why then did it take me 14 months of Ramen noodles and psychological torture for me to get my first investors and raise $250k?
Was I stupid or something? (OK – don’t answer that….)
If you are again asking the same question – Don’t worry, I asked it enough times during that 14 months to have gained a thick rhino skin
But, four or five years later, as I sat in a Board room of the DTi in London I discovered the #1 Reason why some entrepreneurs get funding and others do not and, in all seriousness, it shocked me.
So much so that I stood up, with 21 pairs of eyes instantly looking at me, and disagreed.
“Rubbish…I went through raising funds over and over again and THAT is not the reason why it took me so long…” I nearly yelled.
With an effort to calm me down, the person presenting what they called “The BIG Survey” started to take me through the data and 43 minutes later, the light bulb went off…they were right! (Told you I was stupid!)
Despite all the data, despite all the interviews they’d gone through around the country, despite all of the overwhelming evidence…I found it really hard to believe.
I’d become convinced, after living in the trenches of getting investors, almost failing over and over, that the reason why it had taken so long to raise money was because investors were hard to find…
Become convinced there was a shortage of real risk takers, investors who were more than just talk and bravado…
I’d become convinced there were only a few investors with REAL vision and THAT was why it had taken me 14 months of blood, sweat and oh too many tears to get my first investors.
But after 43 minutes, all those beliefs had been turned on their head. The investors hadn’t been the problem…gulp…
I’d been the problem!
And if you have been banging your head against a brick wall trying (unsuccessfully) to get investors then YOU are the problem…
OK so this is probably that place where you throw that tablet or your mobile phone across the room in disgust…or perhaps knock that desktop computer into a pile of smouldering electronic spagehti on the floor.
If you are in those fund raising trenches and you too have become convinced (as I had) that its about a shortage of money and a shortage of investors courage…this is going to hit you hard.
There IS enough money out there for businesses (whatever the message Press is peddling today…) and there are PLENTY of investors who are lining up to give you money on ONE condition.
One Condition? Really Andrew…?
Yep – Just one.
And that One Condition (as those 43 minutes of real data proveed to me…) is that YOU are…
…believe it or not, there are plenty of investors ready to give you and your company money IF and only IF…(ready for it?)…
If You are “Investment Ready”.
It had nothing to do with networking, being born with a silver spoon in your mouth or some other excuse – they just help you meet potential investors…
Even if you have all those things, if you are NOT investment ready – you won’t get an investor.
If you are Investment Ready then, unless you sit in your basement reading Batman Comics and waiting for the investors to knock on YOUR door, then you WILL get your investors.
And No, investment ready isn’t about glitz, Facebook pages, sophisticated sound bites or a lack of real substance – its about a set of things which I’ll cover in the next post.
But and this is me fulfilling my initial claim…
If you have not yet got your investors either get out of your basement and go to some local start-up meet-ups to start putting yourself out there or, if you are already doing that without much luck…look at yourself and your offer and consider if you are really READY for investment.
Wanting an investor and wanting the money…bad..are not the same thing.
Are your really ready for that investment?
Have you proven the model? I mean REALLY proven it?
Have you spoken to so many would-be-customers you know exactly what they want and what they’re prepared to pay for?
So much so that you would bet 5 years of your life on it?
Because make no mistake – if you take that investor money, you are…
Have you proven to yourself that this is really worth the 5 or 7 or more years of your life you’ll need to commit and dedicate?
And are you ready to sacrifice that time because you have done so much due diligence you KNOW your business can’t fail.
If the answer is yes, then maybe you can become Investment Ready.
With that backed up degree of certainty, now it just about positioning, creating the tools to engage investors and getting out there and doing it.
OK – so those things aren’t exactly easy either but the great thing is there is a tried and tested approach for each stage…
I’ll write a post shortly on what being ‘Investment Ready’ means soon. Sign up and be told when its on the site.
In the meantime, you can check out http://www.TFGCoaching.com while its still open.
Maybe we can help get you Investment Ready.
So do you agree? Disagree? Did this help you?
Let me know by reaching out or adding a comment.
Also you can go along to Facebook and search for ‘Funding Academy’ – its closed so you’ll need to ask to join.
All the best
PS – after 4 years we went back to the United States and became dual citizens…but that, as they say, is another story