Lesson #3
How to Find the Money to Make Big Money
It takes money to begin any venture. The necessary funds can come from a variety of sources—from the very mundane, such as digging into your own savings, or appealing to FF&A (friends, family, and affiliates). Another possibility is going to private equity types, including venture capitalists. I don't like the latter for a pure start-up because of the time and effort it takes to woo professional investors. They also tend to be much too skeptical for their own good, and often want to have too much influence. Although this certainly makes sense for them, it is not necessarily the best situation for the entrepreneur.
In addition to finding initial investors, ideally private individuals, who want to make 10-plus times their money, I have developed a few other unique twists to raise capital that have worked well for me, especially in the early stages of development. These alternatives, although they are a bit unorthodox, have proven to be my most successful. They include attaining backing from suppliers, vendors, and landlords, and providing them with added incentives that serve both sides' needs. I have one simple rule when it comes to most things (that I mentioned in the Author's Note): “If you don't ask, you'll never get.”
Raising money is an ongoing process when you're building a business—one that takes time and a lot of effort. Though most entrepreneurs don't like doing this, they must learn to live with the process, because it's ...
