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Raise Capital on Your Own Terms!

When you hear the word “investor,” what do you picture? When I ask most people this question, they describe a man in a suit (or, if in Silicon Valley, maybe khakis and a button down shirt) in a fancy office spending every work day combing through pitch decks, executive summaries, and due diligence and barking tough questions at terrified entrepreneurs.

Most people picture the type of investor who I call professional investors. These are wealthy individuals and organizations, sometimes investing their own money and sometimes investing on behalf of others. They come in many flavors such as angel investors, venture capitalists, private equity funds, family offices, private foundations, wealth managers, etc.

When entrepreneurs think that professional investors are the only source of investment, many of them very quickly dismiss raising investment capital as a possibility.

They say things like this to themselves:

  • Why would these people even consider investing in my business? I doubt I could give them what they’re looking for.
  • I wouldn’t even know how to get my foot in the door with these people or even how to find them.
  • Don’t these investors want to take control of the businesses they invest in? I’m not ready to give up control. Don’t they even sometimes fire the founder?

If you are limiting yourself to the tiny pool of investors who fall into the professional investor category, you may be right to have fears and concerns. These kinds of investors tend to follow a very specific investment model that is not a good fit for most businesses and may very well not be a good fit for you. The good news is that there are many sources of investment capital and even if professional investors aren’t right for you, I can almost guarantee that there are investors out there who ARE right for you.

  1. The vast majority of investors are satisfied with a financial return that is much less ambitious than what angels and venture capitalists demand.[ii] And the vast majority of investors care about a lot more than financial return when making investment decisions.
  2. You can design the type of investment you offer any way you want to – it does not have to be “expensive.”
  3. It is possible to raise capital (equity or debt) without giving up any control.
  4. Investors can get healthy investment returns even if there is no “liquidity event.”
  5. Investors can get healthy returns from steady-state businesses (i.e. ones that do not grow explosively).[iii]
  6. The “smart money” that supposedly comes from professional investors (i.e. all that expertise that they supposedly have) is questionable. Some professional investors can be a huge asset to the companies they invest in, while others will take the company in the completely wrong direction. The founders often know a lot more about the right direction to take their business than an outside investor does.
  7. It is possible to design a company and its financing strategy in a way that makes lawsuits for failure to maximize investor return highly unlikely.
  8. The universe of investors is far larger than angels and venture capitalists and each investor is unique.

Based on my ten years of experience helping social entrepreneurs raise capital from investors, I honestly believe that any mission-driven entrepreneur, armed with the right tools, information, and mindset, can raise capital from supportive, values-aligned investors.

To learn more, check out my course “Escape the Bootstrap Trap 30-Day Challenge” which includes:

  • Basic capital raising literacy
  • How to find the right investors for you
  • How to get investment-ready

Go to booklaunchspecial.com for free access to the course and a discount code for my book, Raise Capital on Your Own Terms: How to Fund Your Business Without Selling Your Soul.

Jenny Kassan has over two decades of experience as an attorney and advisor for mission-driven enterprises. She has helped her clients raise millions of dollars from values-aligned investors and raised over one million dollars for her own businesses. Jenny is certified as a coach by the International Association of Women in Coaching.