Exposing The Lies Behind Raising Funds | Ariya Chittasy
So you’ve got your business off the ground, and now you are ready to raise funds.
The question is how can you go about doing this?
We’ve all heard about those companies who have raised millions of dollars for their businesses, but how did they do this? Did they just get lucky? Did they get money from the first person that they pitched to?
Ariya Chittasy from Engenesis is here to dispel the common misconceptions that exist behind raising funds for your business.
- raising money for your business does not mean that your business will succeed.
You see examples of business people successfully raising large sums of money all the time, and it’s easy to see this and think “wow, they are so lucky” or “their business must be so successful”...
What people don’t think about is that it is completely the opposite.
- When you raise funds, it is just a commitment to your investors. They are giving you that million dollars, with the expectation that you will turn it into 3 million dollars, 5 million dollars in 2, 3, or 4 years.
Raising money is a debt
Raising large sums of money might make you feel rich at the time, but think about the next day: You now have this enormous debt to bring positive returns on, and if you can’t do that you are in trouble.
Another misconception that people have is that
- You have to ‘have money to make money’
The simple fact is that if you can’t make money in your business without having money, why would an investor give you more money?
So how should you receive these investments?
You first have to build trust with the investor
Think about that time when your friend asked you to borrow $100 when you were a child. What was the first thing that came into your mind?
- Are they reliable?
- Are you ever going to see that money again?
- Are they just going to waste the money on silly things?
An investor is in exactly the same position as you were back then. They’re asking the question;
- Is this founder a dedicated business leader, who will turn my money into business value?
If you can’t answer that question, should you even be trying to ask for funds?
Are you determined to use their funds to create business value? Or are you raising funds just for raising funds?
So what are the alternatives
- Focusing on Venture building
Not just focusing on venture capital. You shouldn’t be raising funds just for raising funds, you should look at “how do I add value”.
Add value for who?
- Your Customers
- Your investors
- Look at what Entrepreneurship really means
“"The entrepreneur takes resources from places of low yield and productivity, and moves them into areas of high yield and productivity"
What does this mean? Well, you should be thinking “How can I take this money, these ideas, my connections, and turn them into something that has high yield and high productivity”
So what’s the shortcut?
Raise money by not raising money
If you go into this process with the mindset of “Whether or not the funds come, I’m here to build a business that adds value to people’s lives. If an investor came in, I could just do that quicker”
Funnily enough, if you can solve problems in the market by leaning solely on yourself and your dedication, investors will line up to give you funds.