Finding Your First Investor
For startup companies, raising your first dollar is the biggest challenge: everyone is hesitant to place the first bet on a new company. Luckily, there’s a range of people out there willing to help – from investment groups and consultants to well-connected friends and registered broker dealers. But even if you’ve enlisted help in your search for capital, on some level you’re still going to have to be involved in the fundraising process. And all too often, in spite of an entrepreneur’s passion for their project, they aren’t psychologically prepared to “ask for money.”
At Bond/Wooley, we remind clients that entrepreneurs should never ask for money. They are selling a stake in a new opportunity. They are inviting people to be part of an exciting venture. And they have to practice their pitch until it’s as familiar and unforgettable to them as a sit-com’s theme song.
There are three psychological tricks that entrepreneurs can employ.
- First, collect “no’s.” Make it your mission to hear the word “no” as many times as you can. Set a daily goal of how many times you want to hear it.
- Second, tell everybody what you’re doing. If a bank teller, a UPS delivery person or a pharmacist asks “how are you doing?” don’t say “fine.” Tell them exactly how much money you’re raising for your new venture.
- Third, build a movement. Replace “How many shares can you buy?” with “How many people can you find who be right for this kind of investment?”
The key is to stop asking and start telling. We’ve seen these tips transform entrepreneurs time and again. And we’ve seen how investors respond positively to entrepreneurs who have overcome any fear of rejection when it comes to financing their startup.
Are you still “asking” for money?