Post from: MAPpingCompanySuccess
This is a guest post from KG Charles-Harris, founder and CEO of EMANIO. KG has been a guest here before, but this time his story is more personal and, I believe, of great use to all of you.
I’ve always understood that fundraising is a grueling experience, but even though I’ve done it several times, it is like childbirth—one forgets the pain shortly after and does it again…
The difficulty lies within a few areas for those of us who weren’t fortunate enough to join Google or Facebook when they were less than 50 employees resulting in a strong network of people with lots of cash that are happy to invest in their friends and acquaintances.
When raising Seed funding or Series A financing the right contact network is alpha and omega. But how can we develop one without having been in the aforementioned or similar environments?
First, even though it is intimidating, seek to develop a contact network that has the above characteristics. This is not a trivial exercise for most people. Wealthy people are not the norm in most social circles and how to find them and get them to meet with us face-to-face often seems like a mystery, but networking your way to solving that mystery is a must.
Then the challenge is to gain their trust. What does this mean? Well, you have to be able to communicate a vision of a technology and market that they likely know very little about in such a way they believe not only that it’s a good market, but also that you are able to create something to that will successfully enter it.
Gaining trust involves a variety of skills such as learning the language of the group you want to communicate with, understanding presentation formats, being able to take criticism and return (after having been rejected) with something better. Showing resilience is always valued, although no one likes to be unduly bothered.
Once having gained their trust, meaning that you have promulgated a credible message around what you are doing and shown that you have the skills to achieve the vision, it will still be a challenge to get them to part with their money.
At this time they will be listening to you and interacting seriously, but actively seeking a reason to NOT invest. It is always easier for an investor to avoid investing than making an investment – there are a lot of potential investments and knowledge that only very few will be successful. As a consequence, it’s almost always easier to not invest.
This avoidance is aggravated by the fact that if you are outside of the investor’s circle of acquaintances, there is a lower level of personal affiliation and higher perceived risk.
In short, what you are attempting to accomplish as an entrepreneur in this phase of your venture is extremely difficult and most fail.
So, in fact, this is the first real test of your innovativeness, tenacity and mettle.
Ultimately, if you are innovative and have tenacity and mettle, you will succeed.
As in sales or dating, it’s a numbers game. With time you will find the right investor and with that a completely new set of challenges.