Rant 2 - You have not raised because you are a ….

You have not raised because you are a ….

It must be the week of rants lol

I get a lot of decks, emails, LinkedIn messages from people raising money. They fall into a range of categories but you tend to find the ones who say they are struggling to raise money are either at

• Super Early stage and have done zero market research, ie no need for their business
• Burned a lot of time stage and have done zero market research
• Pre Revenue
• Lots of PR hype about them but again Pre Revenue
• Have previously Crowdfunded and hit the earth with a bump around raising
• Are post revenue but :-

i) Sky high burn rate

ii) No Long term business model.

I also get similar messages from people who are really bloody good at raising money and are happy to share their experiences and secret sauce on how to do it properly but no one seems to take up the offer.

Raising funds is not easy, takes a ton of time and you get to meet some characters in the process that you never ever want to meet again. There are two sides to that discussion by the way.

Two Questions to ask yourself

1)Have ever been asked the question by an investor “What will you do if you don’t raise?” then you should know there is just one right answer to that question.

2)Have you been raising for two months and no one has bitten and I mean bitten as in cash in the bank. If the answer is yes then time to re look at what you have been doing, don't waste another two months of your life which is far more important than any company.

Valuation - I see so many people spend months of their lives, burning cash and time, and never raising because they have this fixation with a single number a facebook number as I like to call it. Seriously, get a grip. Yes, some investors will take the p*** but the majority of smart investors won't, because there is absolutely no point in them doing so for the long term benefit of the company and keeping you focused. The market will largely dictate what your current valuation is and, if you are based in the UK, please don't do the whole well in the US we would be worth this, it's a pointless ambition when you haven't even smashed the UK yet.

Focus - You have too many. World domination or every functional product known to man is great if you have the deep pockets of Apple. If you haven't then focus on one thing. How do you know it's the right thing? Because hopefully you did some f***ing research (https://www.murray-hundley.com/grumpy-rant/doyour-burn-your-cash)

A Team that can actually deliver - Companies with teams with a ‘real’ track record of building companies, products and so on are such much less risky to invest in. Team is everything and not just a couple of founders.

Your Exec team salaries would be normal at Google - No one expects you to starve or not pay the mortgage, but no one gives a crap about the hire purchase on your Porsche, little Trixie’s school fees or that you use to earn ￡200k plus bonuses in your last job. If that's how you feel then stay in your job or find someone daft enough to finance you.

Put skin in the game - One of my all time favourites. Companies where founders have put significant skin in the game, yes real cash, tend to have a far better reception from investors than those who go, Mr/Mrs investor I would like ￡500k but cannot even be bothered to max my credit card to share some risk but I have spent time on this etc etc People's time is important but if you are a founder and have a ton of stock then suck it up.

Your attitude sucks - Investors like confident people but humble. What they dont like are over-confident arses who think they have every answer in the book and won't ever listen to anything at any point. Immediately as an investor you think this person is going to be hard work or a nightmare for the next 3-5 years.

An over-complicated pitch - If you cannot explain the business in 30 seconds thats a problem. If someone reads your deck and looks perplexed , then thats a problem. Plenty of amazing examples out there covering different ends of the scale.

BS in your pitch - How many pitches, decks do I see where someone bangs on about the world market being worth X zillions and that they are in “serious” conversations with X companies? Translate that and it means in most cases

• Emailed a few companies
• Are talking to the company but completely the wrong person and non decision  maker
• Didn't really qualify our lead
• Market in the world is worth X Zillions because we couldn't actually figure it out for just the market we are going into.

Investment feels like a jail term - So IPO’s are rare. Trade sales are rare. Exits are rare! But investors want to at least have a feeling something might happen and won't be talking to you about an exit in ten years.

I don't want to ask twice more than once - No one likes chasing especially when they are an investor.

Being a tight so and so - You don't want to pay money to raise. It doesn't matter if you are using an angel network like Angels Den or Crowdfunding via Seedrs or using a VC firm like the guys I know, they all have bills to pay. I find it next to remarkable that someone can be raising ￡2m on a business plan that says for years and years they will make big things happen and be worth ￡40m but refuse to pay a range of fees when they have limited options to go and deliver their dream.Raise the cash! Do another sale to cover the cost.

DMH

Twitter/Instagram @TheGrumpyE

www.thegrumpyentrepreneur.com

Hire me and the team for ￡100 a month