Tuesday, December 6, 2016

Lessons Learned Seeking Funding -- Investors want the right "fit"

  I want to share some things that I learned about raising money.  My hope is that my experience will benefit others else who find themselves in a similar position.  I will have at least five posts on this topic, maybe more.  Here's some background.

I gained this experience working as the chief market researcher for an organization that sought funding to establish its business and fund development of its products.  In addition to market research, I also searched for, set up and participated in meetings with potential investors.  These are the things I wish I had known going in to those meetings.

First, most investors (and donors) want or need a certain "fit" for their money.  The fact that you have a great idea, cause or invention has nothing to do with this.  As such -- and I cannot emphasize this enough -- you cannot take it as a personal rejection if what you're doing doesn't match what they are looking for.  If the fit is not there, then you should not push the point.

What constitutes a good fit?  It varies from investor to investor.  And if you don't know their criteria (which may well be the case) then simply ask.  Criteria may include...

  1. The field of endeavor they prefer,
  2. The investments (or donations) they have already made,
  3. The problem you are trying to solve,
  4. The amount of money you need,
  5. When you want the money,
  6. When they can realistically expect to see a return,
  7. How much of a return they will get, and
  8. Your experience in
    1. The field of endeavor
    2. Managing an operation
    3. Handling other people's money
My inclination for situations where it is not an automatic fit:  Be open about that fact and explore it.  See if there's an opportunity anyway.  If there's no fit, then leave on an up note.  Reasons:  1] Most importantly, it's the right thing to do, and 2] whether they invest or not, you want to make allies, not enemies.

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