Startup: “We are trying to raise $700,000.”
Me: “What for?”
Startup: “Marketing, key staffing, operation and design.”
Me: “You are asking for less than half of what you need to launch successfully.”
Startup: “Yeah. You’re not the only one who has told us that, but it seems like A TON OF MONEY!”
And so it goes with most of the startups we work with. I’ve been there as a startup myself many times. More money than we have usually feels like A TON OF MONEY. And somehow asking for A TON OF MONEY is harder than asking for a little. Just like it takes guts to ask someone out who is hotter than you. And just like it’s challenging to walk into a party with people who are better dressed than you. It’s hard to ask for more money than you may have seen before.
But that’s no reason not to ask! As we all know, the “hot date” scale is not what determines if a relationship will last. And the life of the party is often not the best dressed person at the party.
The reason to ask for A TON OF MONEY is because:
- You’re worth it! That’s right. You are worth every bit of A TON OF MONEY. There is only one of you and you have the passion, vision, and leadership to make a change that has huge social and financial value. Go ask for A TON OF MONEY.
- Your idea is worth it! Do you really believe in what you are creating? Well do you? If the answer is “Yes!” than you have something of value. Don’t undervalue it. Go ask for A TON OF MONEY.
- It really takes A TON OF MONEY to successfully launch and to own the market. To be clear, getting investors is not a way to “get rich quick.” It’s a way to open the door of opportunity for you and your investors, building wealth as your business succeeds. The unfortunate mistake that most startups make is underestimating the total startup costs. This leaves the startup short on cash, with their back to the financial wall, making rash decisions and with way too little equity left to raise more capital and maintain control. I’ve been there and it’s not a pretty picture. So… go ask for A TON OF MONEY.
Tip: Figure out how much to ask for (sorry, that was obvious). How do I know how much to ask for? Ask a “pro” who is not interested in investing in your venture. The “pro” could be other successful startups, investors with lots of startup experience, local angel investor groups, CPAs or attorneys with lots of startup experience, etc. Just make sure the person or group you are asking is not a potential investor, otherwise the advice may not be as pure as it should be.