Hello, everyone. This is Alejandro Cremades. Today, we’re going to be talking about how
to raise startup capital for your business. The first thing that you need to know is that
first, you need to find the way to create your materials. You need to create your story.
You’re going to need a pitch deck, and then you’re going to need a financial model.
The pitch deck is where you’re talking about the future when you’re talking about the
market. Obviously, you can go a little more on the numbers, but really, you need the pitch
deck, and you need the financial model.
Then, the other thing that you need to know is, who are going to be those investors that
you’re going to be targeting? It’s going to depend on your industry, on your cycle
of the business, and then also on the geographic location.
Lastly, the other piece that you’re going to need is to have a clear understanding of
what it’s going to take to raise the capital. That is actually what we’re going to be
discussing here. When it comes to the dynamics and what it’s going to take, there are three
very important factors. 1) Storytelling, 2) Process, 3) Listening. So, let’s get into
it.
The storytelling side of it: basically, when you are at an early stage, specifically, I
don’t care of you’re raising $200,000 or if you’re raising all the way up to,
let’s say, 50 or even 100 million dollars from sophisticated investors.
Historical is very important, but what they want to know is that there’s a very compelling
future that is waiting ahead of you, that there is a really incredible company, product
team, and market that they can capitalize on and that by making an investment right
now, they’re going to be able to ride that wave of growth with you all the way to the
finish line, which comes in the form of an IPO, an acquisition, or maybe a secondary
sale where existing investors sell some shares to new investors coming in.
Storytelling is all about the future. It’s not so much about your present or the past.
What you want to do is grab whatever you have going on and push it forward—fast forward
and try to have them dream as to how that journey is going to be by sharing that journey
with you.
The next thing is going to be the process. When it comes to the process, you need to
understand what it’s going to take from Point A, where you’re getting the introduction
to that investor, to Point C, which is closing the money, sending the offering documents,
which are the documents where all the terms of the investment are going to be outlined,
and then also for wiring the money.
From A to C, what you’re looking at is first, there’s an introduction. Then there’s
going to be a follow-up call. Then there are going to be additional meetings. In-between,
there are going to be all types of Q&As and interactions where they’re going to be asking
you questions if they have further interest on perhaps making an investment on your business.
The third and probably the most important pillar when it comes to raising money for
your startup, or business, or whatever that is, or small business, is that you need to
master the art of listening. When I say listening, it’s not listening for questions; it’s
not listening for looking good; it’s not listening for “What can I say to make sure
they get it?” It’s listening for concerns. What separates you on the money are the concerns
in-between. What you want to do is try to get as many meetings as possible with that
investor because every meeting, every interaction that you get with the investor, is just one
step closer to the money.
What you want to do is use every meeting to make sure that you let them speak. That’s
why it’s all about listening. It’s not about talking. You want to keep it simple
on your end. You want to answer it specifically what they are asking you, but really always
focus, focus, focus on the pattern of concerns that are ultimately driving those questions
that you’re receiving because if you’re able to nail it on fulfilling concerns, you’re
going to be able to increase your chances and your closing rate by a mile.
With that being said, that is how you raise startup capital. If you like this video, make
sure that you subscribe, make sure that you hit the comment, and then also the Like button.
And then don’t forget to check out the fundraising training, where we have as well help from
everything from A to C when it comes to fundraising, templates, agreements, live Q&A sessions,
a community of other founders, you name it. Thank you so much for watching.