Will it turn investors off if you tell them about your mission?

Will it turn investors off if you tell them about your mission?

I’ve talked to many entrepreneurs who have told me they deemphasize the mission of their business when talking to investors.  They assume that investors care most about financial returns, and they worry that talking about their mission could get in the way of getting funding.

This is a terrible idea!  Most investors actually want very much to invest in mission-driven businesses that are values-aligned.  If your mission is important to you, you need to say it loud and proud. Furthermore, any investor who does not like the fact that your company is mission-driven is not a good fit for you, and you should not waste time with them.

More and more investors are coming to understand that, in the long run, mission-driven businesses are likely to be more profitable and successful.  When talking to potential investors, if you sense a lack of values alignment, it’s best to move on. Always seek out investors who are focused on your business’ long-term success, not on making a quick buck.

If you stay true to what matters most, you can and will find investors who share your vision and want to support you on your terms.

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Do you have to give up control of your company if you raise capital?

Do you have to give up control of your company if you raise capital?

So many of us have heard horror stories of founders giving up control to investors and then being pushed to do things with their business they didn’t want to do or even getting fired from their own company!  

The good news is that it is absolutely possible to raise money AND maintain control of your business.  I’ve been helping clients raise money for over 10 years, and I have never had a client who gave up control to investors!

Every business and business owner is unique — ideally, investment terms should be tailored to each situation. Unfortunately, most lawyers and finance professionals are unwilling or unable to be creative.  

You live and breathe your business, and you have a vision of what the business will look like when it has reached its ideal size and level of impact. This vision is what should inform the terms on which you accept investment. If you accept terms that are dictated by an investor, you risk sacrificing your vision, goals, and values in the name of complying with whatever the legal documents dictate.

If you structure the investment offering in a way that reflects what you value most, you will attract investors who support you, believe in your vision, and trust you to lead the business in a healthy and sustainable direction—all while YOU maintain control of YOUR business.

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Video: The Death of Venture Capitalism & rise of the #WeEconomy

Video: The Death of Venture Capitalism & rise of the #WeEconomy

Attorney & Creative Capital Queen Jenny Kassan talks about why Venture Capital models are not the right way for 99% of businesses to grow. Join the #WeEconomy and find investors for your business who love you, believe in what you give to your community, and want to see you be successful!

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Bull market may be nearing its end

Bull market may be nearing its end

Stock market investors are rewarding companies that are able to show high growth, while fleeing from companies that are not able to meet ambitious growth projections.  This preference for growth stock results from lower earnings and narrower profit margins.  Stocks are hitting records and valuations are at 15-year highs.  But how much longer can companies like Amazon, Apple, Alphabet, and Facebook continue to sustain high levels of growth?  This is exactly the situation that preceded the last two recessions.  As the Wall Street Journal puts it, “the rally in growth stocks will probably end badly.”  (For complete article click here.)

Now may be a great time to sell some of your publicly traded stocks and invest in a small private business you love!

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What are investors looking for?  It’s not what you think!

What are investors looking for? It’s not what you think!

I’ve been helping entrepreneurs raise capital for about ten years and have raised money for my own business three times.  I also talk a lot to investors.  I have learned that investors are looking for a lot more than a good financial return.  Here is a list of some of the main things investors consider when trying to decide where to park their money:

  • Trustworthy, high-integrity leadership – generally, investors feel a lot more comfortable investing when they sense that the entrepreneurs or fund managers they are entrusting their money with will be responsible stewards
  • Reasonable level of risk – this is very much related to the first one – if investors trust an entrepreneur, they will perceive the risk of the investment to be lower; perceived risk may also be lower when the investor has a direct relationship with the business e.g. as a customer or supplier
  • Transparency – many investors are frustrated with the complexity and opacity of Wall Street investing – they value being able to understand where there money is going and what it is being used for
  • Being part of a community or tribe – when companies treat their investors as more than just a source of funding, but as a supportive, cohesive community, this can create a lot of investor value (I invested in a fund recently that actually provides zero financial return on investment, but gives me access to a community that I love)
  • Being able to tell their friends and acquaintances about the cool thing they invested in – studies have shown that this is a big driver of investor decisions!
  • Values alignment – a majority of investors state in surveys that it is important to them that their investments align with their values
  • Cool perks – invitations to special VIP events, trips, discounts, sample boxes, etc. can add a lot of value for investors – I recently read an article about how much Estee Lauder’s shareholders love to be pampered and get goody bags at the annual shareholder meeting!
  • Low to no fees – many investments involve middlemen and fees – opportunities to invest directly in a company allow investors to avoid those nasty fees

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Why do people assume your business is a nonprofit?

Why do people assume your business is a nonprofit?

I have a client that I’ve been helping to raise money from investors.  It is a for-profit corporation that is successful and profitable.  I am not exaggerating when I say that at least half of the people that I tell about this business assume it is a nonprofit.  The CEO of this company has told me that a lot of people she talks to assume her company is a nonprofit.  People don’t even ask if it is a for-profit or a nonprofit – they say, “oh, how can it raise money from investors given that it is a nonprofit?”

I have no idea why this is!  Here are some possible reasons:

  1. The CEO is an African American lesbian and when people picture a for-profit business owner they don’t picture someone that looks like her.
  2. The company is highly mission-driven and working in a space that many nonprofits work in as well.
  3. Because I am a woman, people assume that my clients must be nonprofits (because a lot of people associate women with nonprofits rather than for-profits).

Has anyone ever assumed your for-profit business was a nonprofit?  This has actually happened to many of my clients that are led by women.

I should mention that the people who assume these businesses are nonprofits are just as likely to be women as men.

What do you think this is about?!?!?

Please note that I don’t believe there is anything wrong with being a nonprofit and I have helped several nonprofits raise money from investors.

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