INVEST IN ME. I WILL MAKE YOU RICH!
Karl Dakin
Capital Coach | Stakeholder Investor Campaigns | Design, Stage, and Manage or Support | Reduce Time, Money, and Risk of Raising Funding | Increase Probability of Success! | Opportunity Management
QUICK CALENDAR
TOMORROW, Thursday, August 15, Community Revitalization, 8 am MDT, LinkedIn Live – Jeff Dangremond – Impact Investing in Communities
NEXT MONDAY, August 19, Don Cohen show, 9 am MDT, LinkedIn Live – Funding Tips
NEXT TUESDAY, August 20, Successful Funding show, 8 am MDT, LinkedIn Live - TBD
AUGUST 22, Community Revitalization, 8 am MDT, LinkedIn Live – Stephen Shaff – Community Engagement
?FUNDING HAPPENINGS
Funding starts with preparation!
An associate arranged a call with a woman seeking financing for a new business. Our call raised several questions related to purchasing real estate and construction, which needed to be answered before seeking funding. However, once this business planning is complete, seeking out funding sources that are key to helping women start businesses will be a starting point in the development of a capital strategy.
In advising a project toward a rewards crowdfunding campaign, it became clear that the different participants in the project were unclear on what needed to be done and who was going to do it. This project will take a temporary timeout while each side exchanges more information and engages in discussions to lock down everyone’s expectations.
Shortly after getting off a call where participants discussed several things not to do when pitching for money, I learned that the champion of a project led off his pitch with, “Invest in me, and I will make you very, very rich.” This no-no is the topic of today’s Funding Point.
A project that had gone quiet and was creating anxiety that maybe something had gone wrong turned out to be a matter of a person catching a virus. This is an example of the best planning that must allow for things that are out of one’s control. Hopefully, the project will be back on track next week.
?I attended a Community Capital Live program with a presentation by the Black Farmer Fund, co-sponsored by the American Independence Business Alliance. A panel reviewed the Fund's formation and how they deploy money to help black farmers in New York.
I was a guest on Don Cohen’s show this morning, where we talked about several topics, including the placement of your investment opportunity where the best investor candidates will see it.
?FUNDING POINT – INVEST IN ME, I WILL MAKE YOU RICH!
?Yes, entrepreneurs will continue to make the mistake of telling investor candidates that they will make them rich if they will only invest in their businesses.
?I hear statements made like this in pitches, and it has the same effect as running fingernails across a blackboard (this is an old metaphor that doesn’t work these days with data tablets).
?If investment in a particular business is expected to generate a high rate of return for an investor, why shouldn’t this be the point that an entrepreneur emphasizes?
?1.??????? It probably won’t happen. There are many reasons why a business opportunity may fail. Any entrepreneur promoting their deal should demonstrate some recognition of this fact.
2.??????? It creates expectations. The investor candidate who hears this statement will get it in their head that this is the likely outcome of their investment. Anything less than getting rich will make them disappointed. I once served on an arbitration panel where a woman sued a broker because she did not make as much money as she expected.
3.??????? It may be interpreted as a guarantee. The investor candidate may interpret the statement as a contractual promise that will be breached if the outcome is something less. Yes, the offering memorandum and the investment agreement may assert that the business has no obligations unless expressly stated within the documents, but judges and juries may think otherwise.
4.??????? Been there, done that. Most likely, the entrepreneur is pitching to someone who is already rich. That is why they are making the pitch to that person. So, the entrepreneur cannot elevate the investor to being rich.
5.??????? Loss of credibility. Experienced investors not only ignore promises of riches, but it calls into question the legitimacy of the pitch. Every word in the offering memorandum will be reviewed from the perspective that the entrepreneur is big on talk and may be prone to overstating everything they have done, are doing, or may do in the future.
?Making a claim of riches will be judged based upon proximity to the business finish line. If a deal is about to close in a few days, and money will be shared around, maybe it is okay to make a claim, although why jinx the deal? If, however, the claim is made at or before the starting line when an inventor just had their ‘eureka’ moment, it is premature. Particularly when the investor or entrepreneur has no experience, is not aware of all of the challenges, and does not know what they are doing.
?Every pitch to an investor candidate must take into consideration all of the risks and challenges that may prevent riches and describe the opportunity with the right amount of optimism.
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SUCCESSFUL FUNDING
YESTERDAY, Eric Hanson was my guest again on my Successful Funding show. Our topic of conversation was “Getting to Yes.” We discussed how to tip over an investor to provide funding.
You may view a recording of the show at:
You may view recordings of all past Successful Funding shows at my LinkedIn profile under Events:
领英推荐
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RCI COMMUNITY FUNDS
As a member of this new company, I am working with a team of professionals to craft a new funding mechanism for revitalizing underserved communities.
TOMORROW, August 15, RCI Community Funds will host the Community Revitalization show at 8 am MDT on LinkedIn Live. Jeff Dangremond will be our guest as we discuss impact investing in communities.
You may register to be in the audience at:
AUGUST 22, RCI Community Funds will present the Community Revitalization show with Stephen Shaff of Community Vision as our guest.
You may register to be in the audience on LinkedIn at:
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DON COHEN SHOW
YESTERDAY and THIS MORNING, I was a guest on Don Cohen’s show, where we started a conversation on tips for obtaining funding that will be continued on Wednesday. Don and I shared insights to presenting a business from the perspective of both the entrepreneur and the investor candidate and the need to establish a genuine relationship that would be the foundation for the investment.
You may view a recording of today’s show at:
You may view a recording of Monday’s show at:
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Don is my mentor and guru on using LinkedIn as a social media platform to build my brand and build my community of individuals and organizations who work like me to help small businesses and communities raise funding.
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SUBSCRIBE
You may subscribe to this Weekly edition of my Instant Funding Newsletter, or you may subscribe to my Daily edition.
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Karl Dakin, the Capital Coach
Dakin Capital LLC
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Capital Coach | Stakeholder Investor Campaigns | Design, Stage, and Manage or Support | Reduce Time, Money, and Risk of Raising Funding | Increase Probability of Success! | Opportunity Management
7 个月How do you pitch your deal?