Scott Duffy explains why most founders fail at fundraising: they pitch the wrong investors. Before you approach anyone, research their background, preferred industries, and check size. Ask about their exit timeline and expected returns. Investors will answer or refer you to someone better.
You.
Hi, my name is Scott Duffy, and today I want to talk to you about raising capital. And specifically I want to talk to you about the biggest mistakes that I see entrepreneurs make when going out there and trying to raise money. And the number one thing that I think they do wrong is they talk to the wrong people. Now, what does that mean? What that means is today investors are probably as risk averse as they've ever been. What they look to do is invest in things that they know. And so if you're an entrepreneur and you're talking to the wrong person, the odds are they're just not going to be interested in your deal, no matter how good it is. So here's a few tips that I'd like to give you today that you can implement immediately. Tip number one, find out the person that you're talking to's background. What have they done professionally? What industry have they been successful in? That's number one. Number two, find out the types of industries that they like to invest in. Because if you're trying to pitch a technology deal and they only invest in real estate, again, it doesn't matter how good your deal is, they're not going to be interested. Number three, find out what stage of investment they want to come in at. So are they interested in, gosh, your big idea before you've really done anything to take action? Are they interested in a company that's generating revenue? Are they interested in a company that's a little bit further along? If you know what stage they like to come in again, that's a great guide. The next thing that you need to know is how much is their average investment. If you go in asking for $250,000, but they only put $25,000 into each deal, you got a big disconnect, you have a problem, you're wasting everybody's time. So how much do they invest next you want to find out what's their exit strategy and what's their time horizon? How long do they want to be in a deal before they're able to get out? And when they do, what kind of a return do they expect? Now you may be asking, how do I find out all that information? Where do I get all that stuff? Just ask. The thing is, the investor that you're talking to will be so grateful that you're prepared enough that you've taken the time that you've shown the respect to find out what's important to them that they'll give you all the information that you need. And if they're not the right investor. The odds are because you're so good at what you do, what they're going to do is turn you on to somebody who is going to want to be a part of your deal. So again, take this information, use it today if you're raising capital, and I guarantee you'll be able to raise more money faster and waste less time getting to market. For more, go to scottduffy.com and have an awesome day.
Sam.
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