[caption id="" align="aligncenter" width="494" caption="to lure the rza to poleng, i once had to serve him tea... but that's another story!"]
[/caption]raising money for a business is one of the most mystifying things to learn and is never properly taught in b-school. newbies often think of turning to their banks, but alas banks don't lend money to entrepreneurs. some people save, which is a good first step--but unless you're financially well off, shelling out $500,000 (often times more) to start a venture is beyond the reach of most budding restauranteurs.
family and friends aka the "angel investors" are the ones you normally turn to. so let me share some of the finer pointers on how to approach an investor.
1) you always gotta have a business plan. well written plans legitimize your ideas and forces you to articulate your vision in words. this is probably one of the most time consuming tasks. i spent 120+ hrs on the summit biz plan.
2) if you're raising a million bucks, your plan has to look like a million bucks. ditch ms word and use apple's pages. ms word docs look generic, but pages has a bunch of professionally design templates that will make your plan stand out.
3) don't rely solely on sending out the biz plan. present it first. have a 7 minute presentation that's compelling and brings to life your vision. power point won't cut it! i use keynote:
4) when u do your presentations, do it in a similar place of business. when i was pitching for poleng, the meetings were always at samovar.
at the time samovar was the only proof of concept that brought tea and food in a zen like environment. i was there so much that the owners asked me what i did for a living! i was afraid to tell them the truth for obvious reasons, so i told them i was a graphic designer holding client meetings. then they told me that was great because they were meeting with investors and they asked them, who their typical client was--and they pointed at me!!!! awkward.
5) there's smart money and bad money. investors merely seeking a return, investors that don't share your same passion for the industry, or don't know you are often the worst investors. you want investors that will be active in the sense of bring people thru the door and helping build buzz. you also want an investors that understand your industry in some sense to help you work thru issues, or at least be sympathetic when you hit a rough patch. but the most important lesson is to have an investor that believes in you which brings us to...
6) investors invest in people and not just ideas. with that said, your investors will measure up the plan up against you. you've got to have a track record of success and they have to believe that you have the ability to see your plan thru. in rasing money for the summit, poleng is my single biggest asset.
sometimes the aura of success stems from having a past working relationship (most of my poleng investors were my fellow cohorts in massive selector) and other times it's based on you reputation. karma is a bitch. don't screw people, or it will get back to you.
7) pony-up. if investors don't see you putting up any cash aka risk--why should they?
i started fundraising at the beginning of march and i've been doing quite well! i've stuck to the 7 points above and so far every investor pitch has ended with a pledge (anyone wanna hear the pitch). i'm pretty confident that i'll be fully capitalized in less than 2 weeks. now if only construction and permits were so easy....
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