4 Things I Would Not Do as a 9-Figure Capital Raiser
Jul 15, 2024
When it comes to raising capital, experience is a priceless teacher. I've made my share of mistakes, but I've learned a lot along the way.
If I were starting over, there are five things I would definitely avoid to save time, money, and stress.
Here’s what I’d also change, along with some tips to help you steer clear of these pitfalls:
1. Chasing Every Investor
⁍➡ What I Did Wrong
In the beginning, I believed that more investors meant more opportunities. I tried to impress everyone, spreading myself too thin and diluting my efforts.
⁍➡ The Better Approach
Focus on quality over quantity. Build strong, meaningful relationships with a select few who share your vision and values.
Tips to Avoid This Mistake
⁍➡ Research Your Investors: Understand their interests, past investments, and preferred sectors.
⁍➡ Prioritize Fit Over Funds: Look for investors who are genuinely interested in your project, not just the potential returns.
⁍➡ Nurture Relationships: Invest time in getting to know your investors personally. Trust and alignment are key.
2. Neglecting Due Diligence
⁍➡ What I Did Wrong
I often skipped thorough background checks on potential investors, leading to partnerships that were problematic and unproductive.
⁍➡ The Better Approach
Always conduct comprehensive due diligence. Know who you're dealing with to avoid future conflicts and ensure a good match.
Tips to Avoid This Mistake
⁍➡ Check References: Speak with other entrepreneurs who have worked with the investor.
⁍➡ Look for Red Flags: Investigate their past dealings and reputation.
⁍➡ Hire a Professional: Consider engaging a due diligence firm to assist with in-depth checks.
3. Ignoring Red Flags
⁍➡What I Did Wrong
Sometimes I overlooked warning signs about an investor’s reliability or behavior, hoping things would work out in the end.
⁍➡The Better Approach
Trust your instincts. If something feels off, it's better to walk away early rather than deal with bigger issues later.
Tips to Avoid This Mistake
⁍➡Listen to Your Gut: If you have reservations, address them before moving forward.
⁍➡Set Boundaries Early: Clearly define expectations and terms upfront.
⁍➡Be Ready to Walk Away: It's better to miss out on funds than to engage in a problematic partnership.
4. Not Investing in Myself
⁍➡What I Did Wrong
I underestimated the importance of personal growth and education in the early stages of my career.
⁍➡The Better Approach
Invest in yourself. Continuous learning and self-improvement are crucial for staying ahead in the competitive world of capital raising.
Tips to Avoid This Mistake
⁍➡Seek Mentorship: Learn from those who have succeeded in your field.
⁍➡Pursue Continuous Education: Take courses, attend seminars, and stay updated with industry trends.
⁍➡Invest in Self-Care: Maintaining a healthy work-life balance enhances your productivity and decision-making.
Thoughts?
The information contained herein is for general guidance on matters of interest only. This information contained herein is not intended to provide you with any advice on financial planning, investment, insurance, legal, accounting, tax or similar matters and should not be relied upon for such purposes. Marcin Drozdz, M1 Real Capital Inc are not financial, legal or tax advisers. You should assess whether you require such advisers and additional information and, where appropriate, seek independent professional advice. You understand this to be an expression of opinions and not professional advice. You are solely responsible for any actions you take with the content and hold Marcin Drozdz and M1 Real Capital Inc or any of it's affiliates harmless in any event or claim.