The Secret Recipe for Raising Smart Money

I’d like to share two secrets I’ve learned from my 25 years and over a billion dollars in deals completed.

First, it always takes longer than the entrepreneur thinks, especially when raising that first, second, or third round of capital for the startup company. It always takes longer than expected.

Second, it consumes an enormous amount of time and energy, both for you, as the entrepreneur, and your team.

What I and other successful entrepreneurs figured out is it’s critical to follow a process when raising money.

Now, most most of my readers and clients are really good entrepreneurs. They’re brilliant problem solvers. They’re amazing creative thinkers, and experts at building a better mousetrap. They put a ton of time and energy on product development, and that’s the way it should be at the very beginning.

I get calls all the time from entrepreneurs that sincerely believe that they’re ready to raise $1 million to $2 million from a venture capital forum. They genuinely believe that if they could just get a warm introduction to the right investor, they’re confident the investor will believe in them.

That might be the case, but usually it’s not. In my experience, most entrepreneurs need help with getting customer traction.

Think about your own situation…if you’ve been pitching investors, I’m pretty sure that you’re always getting a fair amount of feedback from people that say, “Yeah, it’s a really interesting idea, but you’re too early.”

That’s code for “show me that you’ve already got customers and traction.”

Investors always ask about customer traction. I know this because I’ve sat through thousands of those meetings.

If you end up in the chaotic cycle of trying to get more warm interest and more investors, and most of them tell you the same thing, you likely need to focus on hitting revenue milestones. Not only to get a deal done, but also to get a deal done at the valuation you’re looking for.

Most entrepreneurs struggle with this. But successful entrepreneurs understand that they have to become great dealmakers.

So do you, and my goal is to help transform you and other entrepreneurs into savvy dealmakers, because that’s really the biggest difference between successful entrepreneur and one that struggles.

I describe how to find the right investors in the SmartMoney Playbook. It’s free, and you can grab it here.

The 85% failure statistic among entrepreneurs breaks my heart. The people in the elite group of 15% are there because, no matter what, they were able to get a deal done. They were able to raise the next round of financing.

The primary reason that they’re able to do it is because they follow a repeatable, methodical process, which starts with a target investor list. They start, as I do, by identifying the rock star investors, the dream team investors.

Then, they work on the target list. They don’t waste time pitching investors that don’t understand their business. They know how to network like crazy and get the right warm introductions.

And, there’s one thing that separates the great deal makers like Mark Zuckerberg, the WhatsApp guys and all the unicorns from the rest of the pack. That is that they think like an investor. They set and hit milestones, and they stay as focused on customer traction as the investors are.

All this adds up to an entrepreneur who gets deals done.

The difference is knowing how to do that.

I’ve been blessed to learn how to get billion-dollar deals done, and my personal mission in life is now helping entrepreneurs realize their dreams. I’m excited about a number of things I’m doing to reach and help entrepreneurs, just like you:

• my webinars on the secrets to raising smart money
• speaking events in Boston, Silicon Valley, San Diego and elsewhere
• a soon-to-be-announced SmartMoney Startups Mastermind that I’m launching

I’m particularly excited about that last one, the mastermind group, because I’ve learned the truth about taking a startup from inception to exit: it’s a process.

Many entrepreneurs think it’s more like a one-time event…just raise money. But it’s so much more, and it lasts for the duration of your company’s existence.

It’s targeting the right investors. It’s getting meetings with them and knowing what to say. It’s negotiating term sheets, setting and hitting milestones and building a team.

Then, it’s raising later rounds of financing, often from investors who can take you public or strategic corporate investors who can later acquire you. And it’s much more.

The truth is, you can’t absorb all there is to know in a book, or even a webinar. You need mentorship and others to talk to. People who have been there, done that.

That’s the essence of a mastermind group, and it’s why I’m so excited to be in the early stages of creating the Smart Money Startups Mastermind. More details to come, soon.

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