I recently got the inspiration to do a 6-session book study program in which we go through one of the key chapters of my book, Raise Capital on Your Own Terms, in each session. I was thrilled when almost 90 people decided to join us!
We’ve had two calls so far, and participants have been incredibly engaged, not only asking great questions, but also sharing resources with each other and creating interest groups where they are taking conversations further.
One of the hot topics we’ve been discussing is “who are investors and how do you find the right ones?” I gave a presentation about the following distinctions that you should be aware of when raising money:
- Professional investors versus non-professional investors—Professional investors are people who invest in small businesses on a regular basis. Conservatively, they account for only 0.3% of all investors in our country. Everyone else is a non-professional investor—people who go about their lives without thinking much about investing.
- Outside-the-box investors versus conventional investors—Outside-the-box investors are those who have an open mind about what makes a good investment while conventional investors are those who have pre-conceived, rigid ideas about investing. Most professional investors are conventional and most non-professional investors are outside-the-box.
- Accredited versus unaccredited investors—Accredited investors are defined under federal law, generally, as those who have at least $1 million in net worth or $200,000 in annual income. They make up approximately 10% of the population; 8% of accredited investors are “active,” meaning that they actively invest in small business, usually by joining an angel group. Depending on your legal compliance strategy, you may be limited to only raising money from accredited investors, but there are options that make it possible to raise money from both accredited and unaccredited investors—what I like to call “the 100%.”
- Angel investors versus OPM investors—Angels are those who actively invest their own money in small business. OPM investors invest other people’s money (OPM) and therefore are much more constrained than angels due to their obligations to their investors.
Capital on Your Terms Community
Because the book study has been such a success, we are planning to launch a pilot monthly membership program for those who want to learn more about raising capital on your own terms. Topics will include:
- Getting clear on your goals and values—how much capital to raise, when and how often to raise, long-term plans for your business including exit strategy, understanding what you can offer investors, etc.
- Your ideal investors—who they are, where to find them, and designing the ideal relationship with them.
- What to offer investors—different business structures and how they affect your relationship with investors, what to put in the term sheet, how to describe the offering, how to get literate on various aspects of investments, etc.
- Legal compliance strategy—what are the options and how do you stay compliant.
- Investor enrollment strategy—what to show potential investors, how to get meetings, what to say in the meeting, how to follow up and close the deal.
- Prepare to address mindset obstacles—know what obstacles may arise along the way and prepare to address them, so they don’t stop you on your fundraising journey.
The membership program will include live monthly office hours and an online platform where you can get your questions answered, get feedback, and share resources.
If you’re interested in learning more about this new offering, please click here to sign up for our waiting list, and we will email you with the details.