It’s never easy to raise money. People who say, “It’s easy to raise money,” usually neglect to mention the second half of the sentence, which is “if you are in a hot space, know the right people socially, and fit the Silicon Valley central casting notion of an entrepreneur (20something white or Asian male with an engineering degree from a prestigious university).”
When speakers tell audiences, “It’s easy to raise money,” all I seem to hear in my mind is, “Let them eat cake.”
Let’s stop the BS. Raising money is hard work. Not everyone gets funded, even in good times. And even if you raise angel money, your chances of a successful exit are dismal.
What makes entrepreneurs “real entrepreneurs” as opposed to wannabes is that they hear all that, understand the truth of my words, and start their companies anyways.
Hey Chris, I'm a 34 year old Electrical Engineering grad from Virginia Tech, and asian š …I hate the idea of trying to raise money for my secret santa gift exchange website, but I know it needs to be done in order to take the website to a new level. Have any ideas on where to get started?
Thanks Chris, this needs to be said more. The problem is that entrepreneurs never want to say it (publicly) because it can be seen as a negative signal on them or their current venture.
For lack of the ability to say its damn hard, entrepreneurs just give hypothetical tips. The result is a lot of blogs on "how to do it" that when seen in aggregate can create the sense that funding is some kind of right that any entrepreneur has should they just do the right dance.
My advice? Read books and blogs by investors, try to put yourself in the shoes of various kinds of investors and think, "how will I make money."
The best way to raise money is to develop relationships before you have to ask for dough.
The second best way to raise money is to get warm introductions to as many investors as possible. Every investor in the world prefers referrals to cold calls.
Mike – find a somewhat seasoned tech entrepreneur and get their candid advice. Investors won't be candid enough, and don't have the right incentives to be brutally honest. I'm happy to try my hand but there are way better people out there. (add @gmail to contact me)
Ugghh…I hate networking, I hate asking for money, and I don't even like working with other people, but I know that I can't do it by myself (actually, I think I can, but it will take way too long). I guess something has to give. Appreciate the feedback. I'll keep what you said in mind and go from there…
the third best way to get money is to ask those with money for advice instead. š
(that's an old saying from somewhere, not gospel)
@Mike, those are the exact things the anti-Santa said … I think that's why he created a secret society of people who give other people stuff – secret 'Santa's'.
anti-Santa hasn't really been as successful as the sociable and outgoing Santa who people love so much they send their kids to sit on his lap to tell him what they want, and who loves people so much he's willing to work with anyone who doesn't pout, but he's waiting for his idea to catch on and for people to invest in it.
If it's "easy" to raise money, you're probably getting dumb money. Dumb money means a lazy board that isn't useful business-wise.
I'm not an entrepreneur (although I did my own startup and ran a computer store back in the day), but have been a serial startup lifer, and have seen that dumb money can be as problematic as no money.
Hi Chris, recently discovered your blog and have really been enjoying it. Would love to hear your thoughts on the best way to get referrals.
FYI: your "advice" link is showing a stack trace.
Also, let's not forget, "raising money" is the beginning, not the end. The end of either building a successful, sustainable business, or building something that another business wants to buy for some reason.
MJ