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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Three things to do before you talk to investors – Part 1

Three things to do before you talk to investors – Part 1

Too many entrepreneurs jump right into raising money before taking these three important steps.  This is the main reason for the horror stories you hear about entrepreneurs whose investors are making them miserable.  Do these three things BEFORE having any conversations with investors to save time and lots of potential future headaches.

This post talks about the first thing: Get clear on your goals, values, and non-negotiables.

Goals include

  • How many hours per week you want to work
  • How much vacation you want to take
  • What salary you want to pay yourself
  • How big you want your company to grow
  • How quickly you want your company to grow
  • How long you want to run your company
  • What you want to have happen with your company when you’re ready to leave it
  • How you want your company to impact the world
  • How much control you want over major decisions

Values include

  • How you want your employees to be treated
  • How you want your suppliers to be treated
  • Quality standards for your product or service
  • Standards related to your contractors (e.g., would you contract with a manufacturer that has been fined by the EPA for polluting?)
  • What effect you want your business to have on the environment (e.g., air quality, production of waste, carbon footprint)
  • What effect you want your business to have on the communities where it does business
  • Your view of the importance of transparency—e.g., whether you want to share detailed information about your company with your employees, investors, and maybe even the general public

Which of these are so important to you that they are non-negotiable?  Picture an investor walking up to you and offering a check for a million dollars. What conditions would make you refuse the check?

Of course, your goals and values can change over time as your company evolves. But the clearer you are now about what is important to you, the easier it will be for you to make sure that the way you raise money is in service to those goals and values.

To learn more, check out Raise Capital on Your Own Terms.

Want to learn from Jenny live?  Come to Fund and Fuel Your Dreams in Oakland March 8-10.

 

 

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Video: 3 Reasons Women Can Get Funded

Video: 3 Reasons Women Can Get Funded

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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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What is the Bootstrap Trap and are you in it?

What is the Bootstrap Trap and are you in it?

Here are some signs that you are in the Bootstrap Trap:

  • You are using personal credit cards to pay for business expenses
  • You have or have seriously considered doing work outside your business to pay your expenses (consulting gigs, freelancing, driving uber, etc.)
  • You have taken out a second mortgage or home equity line of credit to pay for business expenses
    You know you need support like a bookkeeper, web developer, administrative assistant, etc., but you can’t afford it so you do all of those jobs yourself
  • When you do get outside help, you always go for the cheapest option even though the quality is not up to your standards
  • You desperately need some new equipment or supplies to be able to run your business effectively but you can’t afford to buy it or you buy the lowest quality version of what you need
  • You aren’t paying yourself a salary
  • You’re using unpaid interns which can put your business at risk (this could be a violation of labor law)
  • You know your business would grow if you could hire a sales team, professional marketing support, or some other kind of support, but you simply can’t afford the things you need that would help your business grow

How many of these are true for you?

Should you continue as you are and keep hoping that you will finally get enough revenues to be able to do all the things you want with your business?

If you have been trying to reach that goal for a while and you keep falling behind, it is time to acknowledge that a lack of resources is making it impossible for you to have the business you want. You are in a vicious cycle – without upfront resources, you can’t buy what you need to create a business that generates sustainable revenue.

If you need help escaping the Bootstrap Trap, take my new course, Escape the Bootstrap Trap 30-Day Challenge. You can start today!

Interested in learning more? Get in touch!

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