Raising capital is an emotional process not a rational process
The other night I spoke about how raising capital is an emotional process. I can't emphasize this enough. The entire process of raising capital -- is an exercise in managing relationships. Investors want to feel good about their investment. Investors want to like the entrepreneur and feel confident in the person's ability to execute the business. Once you recognize this fact, below are some concrete tips for raising capital:
- Ask investors questions -- understand who they are and their rationale behind past investment decisions
- Ask questions about who they are - - where they live, what they listen to and what they watch
- Entitlement has no role in the financing process
- If you screw up, apologize
- Recognize the process is a game, play it to the best of your ability
- When your raise your money, say thank you
- If you switch investors abruptly, apologize.
Remember it's not business, it's personal . Entrepreneurs should ignore this fact at their peril.