How to Raise Money as an Entrepreneur
If you will start off in organization you will believe listened to these comments:
” So numerous businesses stop working. Why are you doing this?”
” I hear that you require a large amount of cash to obtain an organization off the ground nowadays.”
” Why are you throwing out the safety and security of your job?”
These, and also even more of the very same, are regular of the obstacles that so called close friends and consultants, put in your mind if you are thinking of starting a company let alone wanting to know how to raise money as an entrepreneur. These obstacles are built on the back of myths about the mistakes and also obstacles which border running your own organization.
In this post, we’ll take a look at a few of these myths and also reveal them to be specifically that … just misconceptions! Don’t get me wrong, being an entrepreneur can be tough and also there are difficulties to cross, but allow’s bring some sound judgment right into the argument!
You Don’t Have a Personal Life in Business
It can be hard handling the duties of running your very own business and spending time with the household, yet at the end of the day, you are going to have much more versatility with your personal life, than any type of staff member will certainly ever have.
Ok, it might help you in the short term however this is not a sound, long term strategy. To be an effective business owner you need to develop connections with both customers and providers who will certainly uphold you throughout the rough times. Being fierce over pricing might obtain you 1 or 2 good deals but you are unlikely to build a lasting and also rewarding relationship. Your objective ought to be to strike an equilibrium in between what you desire and also what your consumer or provider wants.
You Won’t Have To Work As Hard
The concept of running your very own organization is appealing since you can reduce down as well as take life at your very own speed. A lot of tiny businesses do not achieve success up until year 3 as well as so it’s a long slog.
What does make the distinction though, is that you are lastly doing something you enjoy and so the hrs and the battles do not appear like hard work whatsoever. Possibly this myth may be true after all!
You Have To Have an Original Idea
Many businesses are constructed around a main concept. The core items of all quick food locations are the same, as are clothes shops, newsagents etc. You can make a decent living properly duplicating somebody else’s concept yet done in a slightly different method.
There’s only one boss in your brand-new service … the customer. When you were working for that huge, faceless Corporation, the loss of the strange client wasn’t that huge a deal – plenty a lot more where they came from.
In your brand-new world you have to do whatever it takes to keep your consumers and keep them satisfied. You have to listen as well as take note, prior to somebody else does.
Some businesses do require a fair bit of cash money to get relocating yet there are numerous locations you can enter into without the demand to purchase a large quantity of supply, machinery or equipment. The low-capital companies entail the use of 3 really cheap products– your brain power, your knowledge and also your time.
An organization where you market your know-how, not real items, to other individuals can be inexpensively established up as well as carry high profit margins. All you may need is a workdesk, a cOMPUTER and also a telephone line.
Sadly this myth is wrong. We all have locations or abilities in which we succeed as well as it’s this proficiency which typically forms the basis of your organization. Your dedication to documents, financial institution statements as well as the VAT male might not be that high, however branching off on your own doesn’t indicate you have the option to avoid these terrible jobs.
Whilst you were able to do this when you were being in the big company office, you can no longer conceal. These jobs need to be done or else the deck of cards can start to collapse.
If you do have significant questions on specific locations, advertising for example, after that think about taking a program to boost your skills. If it’s something you seriously can’t do, then find as well as go a person to do it for you– do not wish it will go away due to the fact that it won’t.
You will certainly have seen that some of the misconceptions not being true is great news as well as others not so excellent information! Be sensible in thinking about the myths which are tossed at you.
Welcome to another day of growth hacking unlocked. One common trend that I saw was, most companies that were leveraging growth hacking and were succeeding at a very rapid rate, had venture capital to help put more fuel on the fire. So I thought I couldn’t truly create a growth hacking course without including raising capital, just in case you want to raise capital. So in this lesson, I’m going to talk about how to raise capital, and I’ll also be diving a little bit more into that in the next lesson as well. Download the Assets mentioned in this course:
When you think about funding, there’s a lot of different stages from self-funding to seed. Then you get into venture, things like series ABC, or even venture debt. And then there is your IPO. And when companies go public, they’re typically raising money as well. Then you also can get into later stage deals. You can get into M and A, leveraged buyouts. You can get into secondary offering. These are all different ways that you can end up raising money. So now let’s take a look at some examples. One of my companies that no longer exists was called Kissmetrics. I ended up raising $16.4 million over seven rounds, a little bit too many rounds. And one of our competitors, Mixpanel, they raised 77 million over five rounds. At least from some of the articles I read, I don’t know how accurate they are, and they’ve done it in a lot less rounds. When you think about series A, B and C’s, typically a series A round, it can range a lot. In series A funding rounds, investors are not just looking for great ideas, they’re looking for traction, they’re looking for money-making businesses. The average estimated capital raised in a series B round is roughly $32 million. Series C rounds are typically for scaling, growing even faster. When you think about D, E and F, it all just starts blending in. This is when companies just take a lot of money and they don’t want to go public right away and they want to stay private longer. There’s a lot of institutional investors out there. There’s private equity companies, firms. There’s also venture capital companies like Sequoia Capital, there’s investment funds. Some of them are like hedge funds. There’s pension funds, there’s custodian banks, sovereign wealth funds like Saudi Arabia invest quite a bit into startups. There’s insurance companies and family offices. A lot of people are getting into startup investing. And you’ll want to create a potential investor sheet. You want to think about who your competitors are, who could be potential investors for you, and that’ll give you ideas. And where I get a lot of my data from is a site called Crunchbase. You can search around and you can just keep going. You can see who are the biggest players. And from there you can do initial outreach. And what I found is technically getting warm introductions works better, and then you’ll have to do a pitch deck. And then with your pitch deck, you’ll have to present it. And I have some resources to create pitch decks for you. And going over and creating a list of all the venture firms that you can potentially raise money from. But you can find that at Neilpatel.com/training, click on growth hacking unlocked, then go to week one, lesson one and you’ll see the worksheets I have for you that’ll help you with your pitch deck. Some key questions to answer in your pitch deck is, what does your company do? How’s it different? How big is a market? Do you have any traction? What is it? What are the unit economics? If you have churn, what’s your churn? And during your meetings, you want to make sure that you introduce your investor to yourself, your product services. It’s not just about optimizing for the least dilution, you want to optimize for who’s the right fit. And you want to have clear next steps at the end of a meeting such as they’ll think about it, they’ll follow up with questions, maybe schedule another meeting. And after the meeting, make sure you follow up. And keep in mind that you may get no’s. I’ve got a lot of no’s. A no doesn’t mean no, a no just means not right now. And now you should have the answer to all of these and look, no matter what people are telling you, you can raise money even if you’re in a hard industry.