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Help Raising Funds for Startups: The Dragon Slayer

in How To,Offering Help,The Funding Guru

The Dragon Slayer - Slaying the Investor Dragons

The Dragon Slayer - Slaying the Investor Dragons

Received some questions today from readers so thought I would answer them via a post – just in case other readers wondered the same thing.

What is the Funding Guru all about?
The Funding Guru is all about helping entrepreneurs and startups go through the process of fund raising through either angel or venture capital investors. We do that through writing posts on subjects that relate to the process of fund raising, on the dos and don’ts; the tools (such as executive summaries http://www.thefundingguru.com/how-do-i-write-an-executive-summary/ ); business plans; pitch presentations and covers more peripheral elements such as the psychology of the process – i.e. helping entrepreneurs to get into the motivations of the investors and we also include podcasts and videos with investors and other entrepreneurs.

Talking to a reader this morning – he mentioned at first glance the site could be about us at The Funding Guru making the investments ourselves – almost like a Dragon in the Dragons Den giving cash to startups after some analysis. That is not the case.  We invest our time (a much more precious resource than cash – wouldn’t you agree?) on helping entrepreneurs get ready to meet and go through the fund raising process and negotiate the deal with investors – so we don’t made investments ourselves – we’re more Dragon Slayers than then Dragons themselves. I would love to take credit for that line about us but cannot so full credit to Erik Luhrs (http://guruselling.com/blog/)

The funding guru is not about making financial investments in startups or young companies or even about hooking them up with investors – there are legal restrictions that would not allow us to broker deals between startups and investors. These dealer / broker relationships are closely monitored and regulated by the SEC – we do not do deals and we are not middlemen between two interested parties.

How can you help me find an Investor?
Now its true we have some great relationships with angels and the venture capital community and occasionally may introduce a particularly exciting startup to an angel or VC but never for financial or equity gain or because of any ‘deal’.  I do it when I am very excited by a company and see a fit between the different investors I know and I never ever gain from either the referral or the deal. Hope that clears that one up.

Here’s another way I’d like to help – if you are looking for an investor – consider reaching out to me via the contact page above and telling me about your business with a few well written paragraphs – if they are exciting, perhaps I’ll put them up on the blog and encourage interested people to reach out to you directly.

What’s it like being The Funding Guru?
Ah – a great question! A steady stream of fantastic entrepreneurs send me their executive summaries and their business plans pretty much every day. The opportunity to help entrepreneurs is a gift and I appreciate it. So – keep sending me your executive summaries and your business plans – I’ll gladly look through them and do my best to give you feedback on how they can be improved so you can increase your chances of getting angel or venture capital investors.  I was on a plane yesterday thinking about the various entrepreneurs who had reached out recently and thought it may be useful to them and the other readers if I took some elements of these plans and summaries, scrubbed them for data that would be propriety and leverage them to show what entrepreneurs are doing well and perhaps not so well. Real world case studies instead of the usual higher level stuff you usually get from blogs in this space. LET ME KNOW IF THAT WOULD BE HELPFUL!?!? and if you would like to even be one of the first Funding Guru lab rats.

Where are your ads?
Another great question. As you can see, there are no ads on this blog. Actually, that’s not entirely accurate, there are ads for a few free reports which I’m offering as ‘ethical bribes’ to encourage you to join my list. Why? Because I’d like to build a relationship with those people who like to read this blog and the best way to do that is to meet you all – face to face…obviously that’s not going to happen as much as I’d like so comments on the blogs and emails are a close second to actually meeting. So – no ads for other people’s stuff – just my own free stuff and this allows me to focus on creating value and helping you and other entrepreneurs who come to the site – maybe at some point I’ll put an ad or two. We’ll see. One idea I’m mulling over is if there is the opportunity to help early stage companies more systematically and directly – i.e. rather than writing a twenty minute blog – perhaps spend a two or three hours going through the executive summaries and business plans directly and unearthing the hidden veins of gold that run through them to improve the speed and likelihood of getting those coy and hard to get investors locked in.

Would this be a service anyone would need? Hum….

Do you have guest bloggers / writers?
Well I haven’t so far but would its actually a great idea providing the guests have some value to add to the readers. So – if you are an entrepreneur, an angel or a venture capitalist and would like to write a guest post – email me before writing anything and lets chat about what you’d like to contribute – no promises but if its good and if it will help entrepreneurs raise cash then I’m all for it.

Who is the Funding Guru again and what makes you think you can help?
I could spend the next 500 words trying to impress you but take a look around, watch this ( Who is the Funding Guru?) and if you still have questions – contact me through the ‘contact’ page above – I respond to all my emails and comments.

So – I’m not a broker or a dealer but I do often connect entrepreneurs with angels and venture capitalists if they are ready for those conversations. I am open to work directly with entrepreneurs to get them ready for that investor conversation. It would be great to get some high value add contributors to the site, we don’t advertise anyone else’s stuff and I truly appreciate all the emails I get and the ability to help exciting entrepreneurs start and grow great new businesses.

Any more questions?  Reach out via the contact page above and join my mailing list by adding your name and email in the box to the right. I’ll also send you some valuable downloads to help…and if you want to get started raising money today…this will help save you months…(Supercharger)

Andrew

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Roulette or a Sure Thing?

in How To,Raising Money

A game of chance
A game of chance

Maybe you’ve been to a Casino and seen a roulette wheel or perhaps you haven’t – either way, everyone is probably familiar with the game.  There is a wheel with pockets and inside the pockets. Within those pockets of red and black are the numbers – from 1 to 36 and a zero (or double zero) on a green background. 

The wheel is spun in one direction and a white ball is sent in the opposite direction. After the whirr of the rotation comes a click, a bounce and a few more clicks and bounces as the ball hits the sides of the pockets, initially rotating too fast for the ball to settle. As both slow, the small white ball and the wheel both eventually stop the ball sitting inside one of the numbered pockets. That is roulette – a game millions of people have played for the excitement and the chance of winning their fortune– just like a Start-Up!

And just like pretty much every game of chance, people have spent hundreds of years trying to get an edge – a way to shave points off the odds in their favor, with the hope and belief that having a slightly better chance than the House and the next person – they’ll win their fortune.

If you’re reading this blog post – you may not be a gambler, you may not have any interest in gambling – I’m hoping you are here because you are interested in starting or building a business and you are interested in raising money from investors for it. Well folks – you are one of the biggest gamblers there is on the planet – whether you lay your chips on a table in a Casino or not. Make no mistake – starting a business and going into the entrepreneurial ‘Casino’ is risky – and you’re not laying down plastic chips – you are laying down seconds, minutes and hours of your life in the pursuit of something that may be great! And do you know what else?

You should look to optimize the percentages in your favor…

There may not be a House that will take your chips if you lose – but that time you spend on building a new business does not get put back in your life wallet – you spend them, they’re gone.

So how can you weigh those precious percentages and do your best to tip the chances of success more in your favor?

Well, I can think of a few ways but there a many…

1) Try to find someone who has trod the same path you are about to tread – and save yourself some time by trying to understand the opportunities and pitfalls that they experienced. Learning just a few of both will make the time you invest in finding and learning from a good mentor is incredibly worthwhile. It will pay off in dividends of time and money saved.

2) If you are going out to get Venture Capital funding – Andreas, the MD from DFJ I just interviewed, made a point which continues to resonate with me.  Self filter when reaching out to a VC – taking even a cursory amount of time to understand which VC partners are likely to be interested in your business model will increase your chances of success.

3)  When introducing yourself to a VC through either a contact or directly – avoid the templates, the Dear Sir / Madam’s, the cut and pastes - unlike Roulette, finding an investor is not a numbers game – sending a standard form letter to a hundred Venture Capital partners is likely to get you a hundred rejections. How often do you buy when you get an envelope through your front door addressed to ‘The Resident’? Yeah me too!

Now, I’ve been working on a number of tools which I’m confident will tip the playing field in your favor but I going to hold off from launching them quite yet. I want input from more folks so I’m 110% sure they’re ready  and 120% confident they’ll help entrepreneurs optimize their chance of winning the Investor Jackpot- 

But like I said above, raising money from Angel Investors or Venture Capitalists is not a numbers game – but you can certainly increase your likelihood of success – and when you are trying to raise One hundred thousand, or one million or one hundred million dollars – don’t you think you should try to improve the odds in your favor?

If you would like to improve your chances…consider signing up to my mailing list.

As always, I would really appreciate any thoughts or comments.

Andrew

PS – for a short time I have an audio course which could seriously help your fund raising. I’ll soon bundle it with a broader course so it could be pulled from availability at any time.

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Having Problems Raising Money for Your Business? Mega Tip 2

in How To

Last night, while mowing the lawn, I was thinking about some of the ways I was able to break through the barriers and raise both Venture Capital and Angel funding – and while walking backwards and forwards, one of the main ways just sprang into my head. 

I thought I would share this Fund Raising Mega Tip as it really works…

With the first business I started, I almost stumbled across investors and with each business, the same has been pretty much true – and even, when I think about how it all unraveled…even when I was consciously out to raise $5-6 million bucks from the Venture Capital community.

Now, if you are actively out there or even if you will be soon you’re probably either scratching your head in wonderment and disbelief or about ready to throw that coffee cup through the computer screen in disgust…

He almost tripped over his investors?

Crap – I don’t believe it, I’ve been banging my head against a brick wall for months or expect to be soon, and still no investors or a term sheet in sight…

So – let me tell you that mega tip I promised…and it really DOES work

…no kidding….

…

If you go out looking for cash, you will end up getting lots of free (and probably worth what you paid for it… ;-) ) advice from angels and investors about what you need to do to make your business investment ready…

…and, unless you’ve hit some really exciting milestones in your business, that’s probably all you’ve got so far or probably all you’ll get.

Depressing huh?

But there is another (easier…) way…

So – again, if you went out and asked for cash, you probably got ‘advice’…

So what do you do?

Here’s the beginning of the mega tip #2…

You flip that around…

You DON’T go out and ask for cash….

You go out and ask for ADVICE…and it will lead to cash if you are asking the right people…

Still scratching your head?

Let me explain…

Go out there and find some people who have been there and done it already – (I highly recommend a mentor or three whatever happens) – but…

We’re talking about raising cash here – so – go out and find those people that have been around the track before and, making sure they understand how you appreciate their experience, ask to spend some time with them to benefit from this experience.  They probably will – ego is involved, and they will doubtless appreciate the recognition of their accomplishments from someone who can sit at their feet and learn from one of the masters… (…tongue in cheek of course but you’re getting the pitch right?)

Now, assuming you strike up a rapport – you will probably find that they’ll want to help – and then they’ll do that magical thing…they’ll refer you to people that can help…

No lets stop here – if they want to give you names, numbers and emails – you should suggest that an email out of the blue from you will likely end up in the email junk folder. Tell them you’ll only get the time of day if that person know’s you’ve come them – so, ask them to send each of these contacts an email and either cc you or bcc you.

When that happens – reply all and away you go.

A suggestion – check back with the mentor reasonably regularly, tell them how you’re getting on, especially with their contacts, keep them engaged – you never know, you might need them when it comes time to negotiate or at any other time…

This has happened to me often…but, and this is critical…actually go and spend time with the absolute focus on learning as much from that person as you can…do NOT go there, nod a few times and wait for them to crack open their network – they’ll know in an instant and after your coffee, you’ll find yourself on the sidewalk, wondering what went wrong.

So – mega tip #2 – go out looking for advice and it will likely lead to referrals and ultimately cash…having someone who has already won their spurs, tell potential investors to take a look at you is magic!

Mega tip #3 coming soon.

Does all this stuff make sense? Any questions or suggestions?

If you liked this posting – tell a friend, hell…tell California…tell the world…. ;-)

Join my mailing list and you’ll be one of the first to hear about Mega Tip #3.

And by the way – I offered help on my post below – I meant it – if you have ANY questions, I’ll either do my best to answer them in a follow on posting, or find someone that can. Thanks to those that have already sent me an email…so email or comment please…

Andrew

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