MBA2633 Q&A Wednesday: No One Wants To Invest In My Business. What Do I Do?

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On today's Q and A Wednesday, Ryan asks, no one wants to invest in my business. What do I do? If you're hearing a lot of no's or worse, silence, it can feel brutal. But hear me out. You don't need investors to succeed. You need customers. And actually they work hand in hand. Today I'm going to show you how to flip this frustration into fuel. Regardless, if you're looking for investors or people just generally are not believing in what you're doing, I want to show you how to build a business that investors or anybody would wish they had the chance to invest in later. And by the way, if you want to submit a question here on Q and A Wednesday, head over to 100mba.netq and ask away. We'll answer it right here on the show. Let's get into it. Welcome Back to the $100 MBA Show. I'm your host, Omar Zenholm, where I deliver practical business lessons three times a week, Monday, Wednesday, and Friday, to help you start, grow and scale your business. The first concept we need to agree on is that investors don't fund ideas, they fund results. If you ever watch a show, Shark Tank, the entrepreneur walks into the tank and pitches to the investors to these billionaires, right? And the first question that the sharks ask the entrepreneur, the absolute first question and every single time, is how many sales do you have? Because that's all that matters. Okay? It could be a great idea. They could fall in love with the branding of the designing. They might really love this person. That's Pitching. But it all doesn't matter if the market doesn't like it. Right? Their opinion is not really that important. It really is important, is the opinion of the marketplace and if people actually are willing to part with their hard earned dollar and pay for this product or service. So the first question they ask is, how many sales do you have? How much money have you, how much revenue have you made in this first year or second year or up to this year, up to this point? Why do you think that's the first question? Why is that question so important? Well, because most investors are in the business of taking huge risks, right? It sounds counterintuitive, but investors are looking to limit the risk as much as possible. Think about it. They worked so hard to make their millions of dollars. Why would they want to waste it on a high risk product that is not proven? They want to invest in something that has proof, has a track record of selling, of being popular, of being liked, being wanted, being needed in the marketplace. They're in the business of avoiding risk as much as possible. So they want to see sales, they want to see traction, they want to see demand, they want to see evidence that you can execute on the idea. If you don't have these things yet, you're not unlucky, you're just early and you're just asking for investment too early. Well, you might be asking, well, Omar, what about pre revenue companies? There's plenty of companies that get funding before they make any revenue. Yes, but they do have some proof that people want what they have, whether it's signups, whether it's free users, whether it's traction based on previous businesses they've had. For example, a very successful and well known entrepreneur in Australia, Danny Milham, founded a mattress company called Koala Mattresses and they're one of those online mattress companies that deliver you a mattress that's affordable and has a, you know, a crazy money back guarantee and they also sell furniture and all kinds of stuff. But this business that he founded was widely successful. It's probably the number one online furniture store in Australia and he did very well. So when he started his next business, which is called Milk Run, which was like a delivery service business, he raised capital so quickly because he had success in a previous business. In fact, he raised $11 million in two weeks. How did that happen? Well, because investors see proof he has a track record. He can do this. It's not about the Milk Run idea. It's about that this entrepreneur can execute. This entrepreneur has built a successful, profitable business. My money is more likely to get a return on an investment with this person.

We've all been there. You hold onto a coupon, hoping to cash it in at the store, but then you forget about it and suddenly you've got a mountain of useless expired coupons.

Do you think this one's still good? Free milk?

Oh, mate, that expired in 1993.

Dang it.

Fortunately, there are better ways to save money. Like by switching to Geico. You could save about $900 on car insurance without ever touching a coupon.

Ooh, how about this one? Half off floppy disks.

Now you should try a bit of spring cleaning.

It feels good to save big.

It feels good to Geico.

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So what does this mean for you? Well, we gotta dig deep on what's the real reason why no one's investing in you? Well, it's probably because the business doesn't have enough action yet. So, for example, if you can't get customers or enough customers, it's not just a sales problem, it's a business model problem. That means your offer, your pricing, your product, your positioning. Something is off. Something isn't compelling enough yet. Investors aren't rejecting you personally. They're reacting to the current strengths of your business model. They're reacting to the strengths of the opportunity that you are offering them. And that's fixable. We can change that. But your mission now isn't to convince an investor. It's to improve your business. Until the value is so obvious that customers show up without hesitation. Once you have that kind of snowball effect where customers are coming in and telling other people and your business is kind of just growing organically, you will get investors knocking on your door. Trust me. It's happened to me with Webinar Ninja, my software company. You'll get emails upon emails of people wanting to invest. And when that happens, you have leverage. Right? You are not begging for dollars now. They want to invest in you so you can get a better valuation. You can get a Better deal, you can get more money for less percent, all kinds of things. And what often happens, and what happened with me with Webinar Ninja, is that when you start attracting these investors, your business is starting to grow, you're starting to build, you're starting to scale, and you start to realize, I don't even need investors. I can do this on my own. Bootstrapped. Let's get super practical. Here's exactly what I would do if I were you and I was building a business that is looking for investment but doesn't have traction yet. Number one, I would bootstrap like a boss. Okay? Start, lean, strip away anything that doesn't help you build, sell or deliver your product. Remember, profit is the best investor you'll ever have. If you have profit in your business that allows you to pay yourself and reinvest in your business. You have a growth machine. It's almost impossible for you to lose if you are that profitable. Where you're profitable enough to pay yourself or pay your employees, cover your overhead, and then from there have money left over to reinvest in your business and grow. Number two, I would rework and test your offer. If people aren't buying, change something, okay. Is your offer solving a real painful problem? Painful enough for them to want a solution? Is it crystal clear what they're going to get, what that solution looks like? And then finally, is the transformation you're promising exciting enough? Does it get them perking up and be like, wow, that's cool, that's great, I want that. If not, adjust, test again. And by the way, this doesn't end. You continue to do this as the market starts changing, as your product starts evolving. That's normal. That's business. Business isn't a sell and forget it, it's an experiment. It constantly needs to be improved and constantly needs to be iterated upon because that's how you stay competitive. Number three, I would focus obsessively on customer traction. Build a mini launch like a landing page. Have an offer on that landing page that's compelling. That's like a no brain. They would feel foolish not to buy. Have a simple way for them to pay. A checkout process. Push out that product in the world and get feedback from your early customers. Use everything at your disposal. Content marketing, Instagram, webinars, partnerships, networking. If you don't have a network, build a network. Your goal is essentially to get your first 10 customers. Once you have your 10 customers, learn from them what they love about your product and what you can improve about it. Ask Them, hey, if you love my product or service, would you be willing to tell other people about it? Not everybody's going to do so, but a few will. And that will allow you to get more customers. So first goal is 10 customers, next goal is a hundred, then a thousand. Every single sale along that path, along that journey, is validation that you are on the right path, that you are iterating correctly. And number four, lastly, document everything. Investors don't fund dreams, okay? They fund momentum. So track your customer acquisition costs, track your revenue growth, track your conversion rates, track your customer feedback, the testimonials and the information you're gathering for them, good and bad, it's okay. This creates a story of your growth that investors later on can ignore. A good, easy way to do this is what they call building in public. A lot of founders, especially in the SaaS space, they build their product from zero in public. Unlike X, for example, on Twitter, they share the journey. Say hey, I'm launching today. I got my first sale today. I'm now making a thousand dollars a month in MRR. Right now I'm making 20,000 MRR. I made my first hire. They document the journey not only to share and kind of see as a marketing activity, but also it's a great way for you to have a record of your story that you can share to investors later on. Let me give you a personal example of everything I just taught today and that's my software company, Webinar Ninja that I launched in 2014. Nobody offered us funding when we got started. Nobody was throwing money at us. We had to pre sell our product to fill our beta spots to prove the product headlights, prove that we're actually fulfilling a need in the market for simpler, easier, more effective, more engaging webinars. It was literally just a landing page with mock ups and a video and a buy button, right? We generated real cash in that process and allowed us to have some cash flow. We had about 150 beta members in the first 48 hours buy our pre sold product. Again, they don't have access to the product yet. They're getting it in a few months. But we pre sold it for early access and then we opened up another a hundred spots. So we had a total of 250 spots. Those hundred spots sold out in another 24 hours. So within 72 hours we had 250 beta members that funded development that built traction. But most of all it gave me proof that this is a product that needs to exist in the world and people actually want it. I'm not Building a business based on hunches or guesses or the fact that I think it's a brilliant idea. The people out there, the marketplace has told me it's a great idea because they're willing to put money down on the promise of this product. So the moral of the story is, traction first, fund later, okay? Worry about the investors later once you have traction. And by the time investors are interested, you have leverage. Now you have. You're in a position of power and that's where you want to live. And that's real freedom. All right, to wrap up today's lesson, I want to leave you with this. Ryan, who asked today's question and anybody else who's listening. If no one wants to invest in you yet, don't get bitter, get better, right? Improve your idea, sharpen your offer, get closer to your customer. Deliver undeniable value. Because when your business is irresistible to your customers, investors are going to line up. And if they don't, guess what, you still win because your business will be real profitable and yours. How good is that? It's a win win. If you want to keep on learning from me, if you want to go deeper, every single week, we have a great, great resource for you. It's my three Things newsletter. It's something that I absolutely love because it allows me to coach you from afar. Every week I send you an email with three things. Something to think about, something to do, and something to learn. These three things allows you to grow week after week, allowing those skills to compound. It's absolutely free. All you gotta do is go to 100- MBA-NET and sign up for any of our free guides and you get added to our newsletter automatically. Thanks so much for tuning into the podcast. 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