Looking for funding? You're (most probably) doing it wrong. Insights from supporting (a lot of) entrepreneurs around the world.

Most people looking for funding are approaching potential investors in the same way a person matches on tinder and on the first date - without asking any questions - asks the date to marry them.

Stop it.

I get that you are in dire need of investors... BUT

First and foremost you haven't actually done a good job at understanding who your ideal investor is (no... it is not the person who has a wallet). The ideal investor is someone who is already passionate about sector and who has already invested in this area (if they haven't it will take too long to persuade them). Below is a brilliant (if somewhat US-centric) free short course that will really help you (ignore when they speak of their platform to make examples... their advice is really golden). In this course he really does an excellent job at giving practical ideas of how to find the RIGHT people and organisations to speak to.

Important! You are NOT aiming to speak to tons of people. You are aiming to speak to a few RIGHT people and organisations.

Next is to understand how business - especially an entrepreneurial venture - really works...

Understanding where you are on the entrepreneurial journey will make a huge difference to your ability to raise funding.        

Watch this (by yours truly). It is only 9mins long. What you'll realise is that you DO NOT need to find all the funding for the whole business journey upfront! You just need the amount to help you in a specific part of your journey. This reduces your funding requirements substantially and makes it much easier to attract people & organisations to support you (eg "I need $500 to film a course and test an idea" is easier than "I need $ 100.000 to launch a business and grow it globally")

Want a few more practical tips?

1.?Contrary to popular perception there are a lot of resources available for you?that could classify as funding, if the definition of ‘funding’ is not limited to just a cash injection. Funding a business often is about resources, knowledge, networks, support structures, space (office and industrial), mentoring, value chain integrations, etc. The fact that most of the time entrepreneurs are just shouting out for cash is in my view based on an entrepreneur not having a clear understanding of what they really need to succeed. I would argue that cash is the last thing you need (the logic is that regardless of how much you grow you will always constantly be struggling to find cash in the form of finance or free cash flow).

2. When we have asked entrepreneurs what they would use funding for,?the ‘shopping list’ often includes items that are either not really that necessary?(e.g. a powerful new laptop or a new vehicle that could be gotten for half the price or leased from companies with spare capacity) or misconception driven (e.g. I need to hire an expensive sales team when current sales efforts are not showing any results to justify that expansion in resources). Many times what entrepreneurs need funding for (up to 70% of the funding amount) is actually available for free or almost for free in the market (e.g. spare warehousing space, incubation space, mentoring, support, free tools to automate certain aspects of the busines, etc.

Want to know if you deserve funding?

1. Take a good hard look at yourself and if you really did the legwork to become more efficient. Eg. Are you using any of the excellent free online apps to handle your bookkeeping, invoicing, billing, time tracking etc? No? Yet you want people to trust you to use their money in your business efficiently?
2. Do you know who your customers are? I don't mean "everyone". I mean who is the person you want to speak to in details. E.g. if I asked you to find the person who buys your service can you send me their linkedin profile? Profiling is much more important than you realise. Stop going through life with shotgun approach to networking.
3. Have you created a conversion page (basically a much shorter website) whose only job is to convert visitors to a specific action? If you haven't even done this you don't deserve funding. This is free and so so crucial to test your assumptions (e.g. before launching any initiative I create a site and launch the site and test what the response is and then either kill the idea, re-work the site or invest a small amount to test the idea further). Also much easier to show potential investors a page that is really working than just a concept.

Finally...

As our friend in the free course beautifully says, approaching random people as the occasion arises is the wrong way to find funding (and he should know - he supports a lot of people looking for funding). Systems are more important than goals. You might want to raise a set target and you randomly find and approach organisations and people. You might be lucky but most probably you won't. If instead each day you have a specific target, EG Monday finding organisations that fit your project, Tuesday go through all applications etc