Moore to the Point: Advice from Successful Entrepreneurs

Raising capital can be a daunting task. However, it is one of the most important tasks for many founders looking to take their business to another level of performance. Whether you’re looking for investments from individuals or institutions, here are some helpful quotes I’ve captured from working with experienced entrepreneurs over the years.

“Dig your well before you are thirsty.”

The best time to start looking for money is before you need it yet. Often raising capital takes longer than the founders expected and getting started early is essential. Start developing connections and relationships long before you actually need the money. Most investors prefer to discover new opportunities long before making an investment and avoiding a cash emergency in the business makes the land much more attractive.

“Treat investor presentations like strategic sales calls.”

After all, you are “selling” your business as a great investment to potential investors. First, qualify your investor candidates much like sales professionals qualify leads by researching your potential investors and focusing on those that match your industry, life stage, and so on. Then, align your pitch to their specific situation. As with sales, put yourself in their shoes and think about how investing in your business meets their investment goals. It’s essential that you empathize with the investor and look at your business from their perspective, not your own.

“You set the price, I set the terms.”

I first heard this valuable advice from a serial entrepreneur speaking to a group of founders about fundraising at an event I hosted years ago. Essentially, he said that founders focus almost exclusively, to their own detriment, on the value of their business without regard to the detailed terms of the investment proposal. It is in the terms of the agreement, he explained, that there are important stipulations regarding future investment cycles and board influence. It is therefore crucial that founders understand them as they could have a major impact on the future of the company.

Presenting to potential investors can be a humbling and exhaustive experience. The success rate, especially for new founders, is extremely low, and the whole process can be frustrating for even the most optimistic visionary. Following the advice of other entrepreneurs won’t make your job any easier, but it will definitely improve your chances of getting the growth capital you’re looking for.

John Moore is a Principal at Momenteum Strategies, an upstate-based consulting firm specializing in helping communities and their economic development organizations create thriving and impactful innovation ecosystems.