How not to raise traditional capital … How to raise capital from “guerrilla”
Website design By BotEap.comWe have compiled a list of some practices that will surely destroy your chances of attracting investors. Ignore these lessons at your own risk.
Website design By BotEap.com* Poor market research, weak business plan
Website design By BotEap.com* An unfocused, “shotgun” approach to which venture capital sources draw
Website design By BotEap.com* Does not have enough seed capital dedicated to the capital raising effort
Website design By BotEap.com* It does not give enough time to raise the capital.
Website design By BotEap.com* Seeks too much capital or sets too large a minimum initial investment for the project or company.
Website design By BotEap.com* You do not have enough equity capital committed to the project.
Website design By BotEap.com* You do not have a clear picture about the use of the income.
Website design By BotEap.com* Does not have a projected rate of return on investment
Website design By BotEap.com* It does not guarantee an exit strategy for the investor.
Website design By BotEap.com* Does not have a strong management team in place
Website design By BotEap.comEven when advance financing is secured, the entrepreneur can make strategic mistakes that make the follow-up investment less likely.
Website design By BotEap.com* You don’t raise enough capital early enough in the game.
Website design By BotEap.com* Engages in spending capital before adequate capital is secured.
Website design By BotEap.comIf traditional venture financing routes are denied, many entrepreneurs will turn to techniques often referred to as “guerrilla” financing:
Website design By BotEap.comAnnouncements of commercial opportunities. Advertise in a local newspaper or national publication with these ads. Indicate the amount of money requested, the type of business involved and the type of return that is projected.
Website design By BotEap.comInvestment “party”. Throw a party to explain your business plan, profit potential, and how much you need to your friends. Give each of them a copy of your prospectus and ask them to commit to a thousand dollars as a non-participating partner in your business. Check with current tax regulations.
Website design By BotEap.comOccupational investment groups. Next time you talk to your doctor or dentist, give them a leaflet and explain your plan. They can invest or perhaps make an appointment for you to speak with the manager of your investment group.
Website design By BotEap.comNonprofit assistance groups. Many areas have Small Business Investment Companies and Business Development Commissions whose objective is to assist in the establishment and growth of new businesses. Many offer money or facilities to help start a new business.
Website design By BotEap.comMoney brokers. They circulate your prospect to several well-known lenders or investors. They usually require an initial or withholding fee, then they take a percentage of the gross amount that is ultimately acquired for their needs. There are no guarantees of success.
Website design By BotEap.comStrategic partners. Consider the feasibility of merging with a company that is already organized and with facilities that are compatible or related to your needs.
Website design By BotEap.comThe person who is determined to succeed will use all possible approaches.