Learn How to Raise Capital Talking to Investors

Providing an Opportunity

Mark Kenney was a CPA guy and an IT guy but he wasn’t the sales guy, the marketing guy or anything like that. He was more of a one-man shop for the most part where he did his IT company. In a recent conversation with me about raising capital, he shared how people struggle typically with one of two major things.

One being analyzing deals,

and the other;

Raising equity. 

When raising equity you need to look at it as:

"I’m not asking people for money, I have an opportunity." 

Most people don’t know they can invest in deals like syndication. Most people have never heard of the word syndication. You’re providing an opportunity for them that is more than likely better than any other investment they have ever done before.

The Realities of Raising Capital

With that said, when you’re new to this and you attempt to start raising capital, it’s not very likely that someone will approach you and say:

"It is a lot easier raising money the first time than you think." 

99% of the time, it’s the opposite, especially if you’ve never raised money before. If a syndicator says, 

"How much money do you think you can raise?" 

And you say,

"I think I can raise a million dollars, no problem."

That isn't an entirely educated guess. They may then quiz you further by asking;

“How much have you raised before?”

“Zero.” 

You have no basis to estimate off of, you might be able to raise a million or more, I don’t know, nobody knows. The reality is, there is no basis there. When you’re looking at it and you say, 

"Okay, well, I’m new, how do I do that?" 

First of all, I would say, partner with somebody that has a track record if you can do that, with that, you can then say;

“Hey, my partners and I own X number of doors and we have been doing it for 20 years.”,

and they respond;

“Aren’t you new?”

“Yeah, I’m new to this that’s why I’m partnering with somebody.”

"Aren't you in IT?" 

"Yeah, I was in IT but now I’m doing this." 

Having that reputation where people know that you have somebody else to rely on, it won’t make it easy but it will make it easier. 

Follow-Up Is Key

Spend your money and time wisely. You have to go through all that effort of meeting people, attending meetups and more. I say that even at a minimum if all you do is follow-up with people you meet personally and at the events, you’re further ahead than 99% of people out there. It may result in nothing, or it may result in a partnership or friendship that changes your life forever.