KNOCKING ON DOORS
Karl Dakin
I help you overcome challenges to raising capital. Take advantage of my Motivated Money Method to identify those investor candidates that are most likely to invest. Top expert in fundraising.
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TOMORROW, THURSDAY, NOVEMBER 21, Community Revitalization show, 8 am Mountain Time / 10 Eastern Time
ASK CAP
?CAP, my artificial intelligence (AI) avatar is available on my website 24/7/365 to answer your questions for free on matters related to funding.
?I developed CAP with a license from Knowledge Avatars to answer frequent questions about funding to save myself time to answer the harder questions.
?I asked CAP,
“How many investor candidates must a small business contact in order to successfully complete a capital campaign?”
CAP responded:
“The number of investor candidates a small business must contact to successfully complete a capital campaign can vary significantly based on several factors.
Generally, businesses should expect to engage dozens or even hundreds of potential investors.
?It's advisable to consider a conversion rate; for instance, if you anticipate a 5% success rate, you may need to contact 20 investors for every successful commitment.
?A focused strategy, clear pitch, and strong networking can increase your chances of success.”
?FUNDING POINT – KNOCKING ON DOORS
Too many capital campaigns anticipate that the entrepreneur will make pitches to everyone they believe may be wealthy. This is essentially a door-to-door cold-calling pitch. It will be necessary for the entrepreneur to knock on a series of doors until the funding goal is attained.
?As I asked CAP above, how many doors must an entrepreneur knock on to obtain funding?
?As CAP stated above, this will depend in part on the conversion rate. A conversion rate is a mathematical calculation where the number of investments received is divided by the total number of investor candidates that the entrepreneur pitched, including both investors and non-investors.
?As an illustration, CAP used a 5% conversion rate. The statistics for angel investing indicate that a more accurate rate would be 2% or 2 in 100 pitches.
?The question then presented is how many doors must an entrepreneur knock on to attain their capital goal?
?There are several factors that may increase or decrease the number of doors:
·?????? Dollar amount of capital campaign goal
·?????? Minimum dollar investment
·?????? Term of investment
·?????? Type of investment (debt, equity, or revenue share)
·?????? Industry in which entrepreneur competes
·?????? Maturity of business
?For purposes of this article, let’s say that the dollar goal of the capital campaign is $1 million.
?And, if the minimum dollar investment is a crowdfunding dollar size of $100, then 10,000 investors may be needed, while if the crowdfunding dollar size is an angel investor size of $25,000, then 40 investors.
?Using the larger dollar amount of $25,000 and the needed number of investors at 40, with a 2% conversion rate, then it will be necessary to pitch to 2,000 investors.
?The question then becomes how long will it take to make a pitch to 2,000 investors?
?Theoretically, an entrepreneur could:
·?????? Simply post on AngelList within 5 minutes
·?????? Send an e-blast notice to all the wealthy people on the planet in the same five minutes
·?????? Get invited to 20 different pitch competitions where there is an audience of at least 100 people in each event
·?????? Engage 20 securities brokers who each have a book of 100 investors
·?????? Get invited onto Shark Tank, where a pitch is made to four investors
·?????? ?Research, contact, and get invited to present to 2,000 investors.
?This is what entrepreneurs do every day. How successful do you think they are?
?I assume that every investor will engage with an entrepreneur four to five times before making an investment. Each engagement represents an investment of time and money in making the pitch, preparing the pitch, and providing information in response to the investor’s due diligence review.
?Unfortunately, every investor candidate who does not invest may require the same amount of time and money as the entrepreneur before deciding not to invest. It may take an entrepreneur 8,000 engagements to result in 40 investments.
?In addition to investing in real-time, the entrepreneur must also account for lapsed time, which is the duration of the capital campaign.
?If an entrepreneur makes five pitches a day, it may take the entrepreneur 1,600 days to complete all of the pitches to result in 40 investments.
Even if an entrepreneur achieved their investment goal with the first 40 investor candidates, they still may require 160 engagements at five engagements a day, requiring 32 consecutive days of engagement with a perfect pitch score.
?Even if an entrepreneur found a single investor who would write a check for the full $1 million goal, it would be reasonable to anticipate that it would take an additional two to four weeks to work through the entire pitch cycle.
?When I am commonly asked to help an entrepreneur raise any amount of money, I assess the time needed following these guidelines. Entrepreneurs who approach fundraising with the expectation that they can raise money overnight are not being realistic. This reflects badly on the credibility and capability of the entrepreneur and how they are viewed by me and investor candidates.
?It should not be surprising that entrepreneurs run out of time and money before reaching their capital campaign goals.
?Success will be dependent upon becoming more efficient in targeting qualified investor candidates and building trust while enhancing the motivation of the investor candidates.
?BELIZE REAL ESTATE & LIFESTYLES SHOW
THIS MORNING, Boris Mannsfeld & Associates - Placencia, Belize Real Estate and I hosted the inaugural Belize Real Estate & Life Styles show. The program covered a wide variety of reasons why Belize may be in anyone’s future for tourism, business, or retirement. ?
You may the show recording at:
?SUCCESSFUL FUNDING SHOW
?THIS MORNING, tom Frey was my guest on the Successful Funding show. Dr. Tom Frey is a world-class futurist. We talked about the future of funding. The conversation included the topics of change, tokens, cryptocurrency, anticipated changes at the SEC, and higher quality access to information.
?You may watch the recording of the show at:
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Karl Dakin, the Capital Coach
Dakin Capital LLC
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5 天前That's Veary informative and is going to be Amazing program thanks for sharing this karl Dakin best wishes to you all their?????????????????????????
I help you overcome challenges to raising capital. Take advantage of my Motivated Money Method to identify those investor candidates that are most likely to invest. Top expert in fundraising.
5 天前How many doors are needed?