Basics of Raising Investment Capital

Raising investment capital is a full-time job. As a CEO, you know it is almost impossible to divide your time between managing your organization, visiting your customers, and anything else -- let alone preparing for and executing the fundraising process.

That's where I come in. I can help you resolve these critical marketing and bandwidth constraints. Did I say marketing? Yes, I said marketing. Your bandwidth constraint is obvious: You don't have the time to telephone tens, maybe hundreds, of investors -- a tedious and arduous task.

But, why are we discussing marketing here? Simple. Before you go to the investment community, you must have a well-positioned company with a succinct, memorable, repeatable story to tell -- what I call being ready for prime time. Furthermore, your documents -- executive summary, business plan, and PPM (private-placement memorandum) -- must articulate powerfully and clearly why your company deserves the investment capital and how it will use the capital.  

If you are not ready for prime time, you will fail at fundraising. Moreover, I will not call one potential investor until I am convinced your company is marketable. You get one shot at investors. If your story is half-baked, it is unlikely they will give you another shot.

Others may take your company, as is, to the investment community, working only for a success fee. I won't. Remember: You get what you pay for.

There are six fundamental steps to raising capital:

1. Getting ready for prime time
2. Targeting investors
3. Calling investors to arrange meetings
4. Visiting and presenting to investors
5. Negotiating termsheets
6. Putting investors' checks into your company's bank account.

Copyright © 2003-2007 by Marc H. Rudov
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