Many of us dream of starting a business. But finding the investors to believe in us is not quite as simple. While startups and small businesses are a vital part of the American economy, venture capital doesn’t see the merit in every plan. Silicon Valley and tech — among other high flying businesses — may court and win the big dollars of venture capitalists. But there’s a whole set of investors out there who are likely to fund the rest of us. Luckily, we have Jenny Kassan terrific new book, ‘Raise Capital on Your Own Terms: How to Fund Your Business Without Selling Your Soul,’ to show us how.
Kassan, an attorney, investment innovator and entrepreneur’s coach, has spent decades helping entrepreneurs find investors for their business. She’s written the book to demystify just what it takes to actually land the funds you need. It’s also an encouraging reminder for entrepreneurs who consider themselves outside the norm. There are investors out there.
But finding the capital you need is anything but a game of chance, Kassan explains. First, aim far beyond the confines of the classic V.C. network. Start the effort by knowing who you are, what you stand for, and what your non-negotiables are. Prepare a compelling, well-crafted funding offer that is clear, honest, and inviting, and then, start looking.
Yes: There Are Just Ordinary Investors
Most investors are just average American adults interested in having a hand in some meaningful endeavor, notes Kassan, and they may not even require steep profits to come on board. That’s good news for women entrepreneurs, who have been left out of the equation by the old boy’s network of venture capitalists — who award male-owned businesses far more than they do women’s.
Reading this book is a like consulting with your favorite attorney — you want to follow the instructions to the letter, and take all cautions to heart. Aside from presenting a brighter and more inclusive picture of potential finding capital, it also may be that Kassan wanted to protect us from our own worst instincts. Aligning with the wrong investors means selling your soul, as the book’s title says. But holding back from finding capital in order to maintain your own vision is just as tricky a move.
As Kassan notes, self-funding will shorten the lifespan of your company. It will also nearly guarantee you’ll never be able to get a full night’s sleep again. You’ll burn out faster that you can imagine. Kassan calls it the “the bootstrap trap”: the former visionary is now a manager with a migraine, responsible for everything and everyone without any cushion or relief. But there’s a profound difference between self-sacrifice and start-up.
More startups and small businesses succumb to cash flow problems than any other issue, and more entrepreneurs are swallowed whole by the pressures of taking care of everything, every day. One key reason: there’s no time to devote to chart direction or achieve any kind of sustainable growth without outside support.
Kassan’s book outlines how to seek out those investors who believe in your vision and let you maintain control. It offers proven strategies for the entire funding journey, including learning how to be sharper and more confident. Like much of business, success depends on good mental game. That’s where knowing yourself comes in: when you’re clear on your own vision and values, you know when it’s not the right fight.
She also takes the mystery out of legal and compliance issues, with helpful tips on navigating laws, choosing a fitting compliance strategy, and meeting the needs of each investor with projections and due diligence. But for some investors, commitment and a sense of passion go a lot farther than a complicated dossier, she points out. In other words, finding that funder may not be as hard as you think it is.
This book is probably long overdue: How many businesses haven’t even gotten off the ground because there was no optimism or confidence regarding funding? Certainly the question speaks to so many women in particular. But Kassan gives everyone the tools to find investors that are a good fit. Perhaps the American dream isn’t just to have an idea and start a company, but to also have people behind you that believe in what you’re doing, and believe in you.
For more about Jenny Kassan and Raising Capital, visit the author’swebsite