Need Capital For A Large Project? (Read This First)

I get tons of requests for Capital Raising or Funding on a regular basis and in most cases I am forced to ignore them because of a few reasons which I'll list below:

1 - The "Next Big" Fund or Project...

I get that people get excited about their own businesses but the problem isn't the fact that you're making bold statements about how you'll be the "next big thing" or how "billions can be made..." The issue is the fact that whatever you're claiming is being claimed hundreds and thousands of times out there and are being constantly pitched without any real genuine basis for what is being said.

Why should you be chosen over someone who's got more experience, more credibility and more resources than you?

2 - I need funding with "No Up-Front Fees" or Costs...

This is probably one of my favorite ones. I'm not saying that funding can't be achieved with no up-front, but there are a few things to seriously consider if you're approaching someone who's probably got some serious access to capital.

A) Unless you're into Real Estate and have verifiable "skin in the game," very few serious capital providers or introducers will make effort to "work for free..." You'll also need to spend on the Real Estate type of fees that are necessary to close the transaction which can add up to easily be in the thousands of dollars.

B) Success Fees are good, but only because you bring significant IP or Brand Credibility to the table. No one is there to educate you on the ropes and trends of how to get capital as well as what you need to do. You need to come prepared and be ready to prove your worth above all of your competitors. I mean "dominate" the space you're in so that every corner I turn to research on your niche or industry, your brand shows up. Unless you're at that stage, no can do. That is the only viable way you can get "success fee" basis funding. Even at that, very few will even consider touching your file.

C) Costs will need to be accrued, especially on the legal and due diligence side. I understand that for many, they've lost money to non-performers but in today's world, everyone has access to an attorney who can review the contracts and arrangements to protect you. In most cases, attorneys will do a thorough job to go over the pros and cons of any deal you choose to partake in. If you're not willing to retain an attorney who's there to protect you in commercial activities, no one can protect you or help you.

Professional services that introduce capital will have fees and costs associated with the aspect of putting together the necessary means to engage with the investment community on your behalf.

3 - One Man Show...

This is no surprise to the Lending and Investment community. I get a lot of pitches on deals that are simply a "one man show." The crazier part is that these individuals are requesting funding that are upward of $10 Million.

While it's good that you have confidence in running your business and feel that you can handle that kind of capital, it's very hard for any investor or lender to take you seriously (unless once again, you're into Real Estate and can prove your net-worth).

In any case, funding requests like these will largely be denied and ignored. Unless you put together a team which bring in their own unique experiences and expertise.

Help yourself avoid the frustration and think of the above standards that I've shared with you. This is especially true if you're looking for funding a large deal or transaction.