Looking For Investors Or Small Business Loans – Don’t Let the Capital Raising Process Get You Down

Entrepreneurs who are new to the process of raising capital almost always get discouraged at some point along the way. They become frustrated with the lack of positive reaction from investors. They really get frustrated with how slow the process is. Eventually they may even start to doubt themselves and the viability of their venture. If you’re looking for investors or small business loans. Here are some things to keep in mind:

1. Nearly every entrepreneur has had the same experience when they first enter the market for venture capital. No matter how frustrated you might feel, you are not alone. You should never let a lack of immediate positive response shake your confidence, or take it personally.

2. The venture capital industry is not at all an efficient market. No matter what the venture capitalists might say, the best deals do not necessarily get the capital. If you are not getting a positive response, it may not have anything to do with your venture but everything to do with: VCs are swamped with business plans and contacts from entrepreneurs. It is very difficult for them to give every entrepreneur a fair hearing, or any hearing at all in many cases.

One trend in recent years is venture capital firms having websites with e-mail addresses for entrepreneurs to contact them. Sounds good, right. Saves the cost of mailing the materials and allows for immediate contact. Maybe not. The e-mail is often to a blind address, such as: Submissions@bigbucksVC.com. You are not given a contact name, or any means to follow up. They do this on purpose. If the volume of submissions to too heavy to deal with, they can always just employ the “delete” key. Your goal is to develop a relationship with a decision maker in the firm, not just be in a slush pile in some junior assistant’s e-mail box.

NOTE: never send your full business plan to these blind e-mail addresses. Only send it to a partner in the firm who has requested it, so you have a record of who has read your confidential information.

3. So who succeeds? The entrepreneurs who persevere. If you contact them by e-mail and hear nothing, look up their phone number, the name of a partner in the firm and call them. If they don’t call back. Try again. Use any an all means to get referrals to investors, through any of your associates or colleagues, which has a higher probability of success than cold calls.

4. Be wary of criticism. Investors may give you reasons for declining the investment in your company that don’t make sense to you. You might even start to doubt your Business Plan or whether your venture will succeed. There’s an old expression, consider the source. How do you know the investor who was so critical knows what he or she is talking about? How do you know they actually took the time to analyze your venture beyond a superficial review of your Executive Summary?

The larger issue is, it is very difficult to figure out whether a start-up company is going to succeed. No one really knows. It’s like predicting which independent movie with score big at the box office. It is up to you, the entrepreneur to be steadfast in your belief in your venture.

5. Quite a number of investors are just plain rude. You’ll encounter some in the capital raising process. Don’t let their lack of business courtesy get you down. Just file it away as experience that makes you a stronger CEO. Be glad you found out what they’re really like now, rather than when they’re deeply involved in your company. And years later when you are a big success and in the position to help or encourage another entrepreneur, please make sure you do so.