What I learned from Raising Money.
A year ago I didn’t know any investors. I didn’t know how to find them, let alone ask them for money. When I first set out to fundraise, I was scared to ask for more than 250k. I had the mentality of only wanting to ask for “enough to get by”. I recently closed Nopalera’s oversubscribed Seed Round of 2.7 Million. How? The first thing that had to change was ME.
Here's what I learned about myself and money through this fundraise process.
1. When you are an early stage company, people are investing in YOU.
You will need to define clearly why YOU are the badass CEO that can build and lead a team to the finish line.
You need to exude confidence. If you are feeling unworthy, small, and insecure, you will repel money.
I am fortunate to have over 15 years of experience being a bandleader under my belt. I have played for thousands on stage as well as to four people and had to bring the full energy each time regardless. I've been rejected by hundreds of clubs and talent bookers. I kept going. You will never build your confidence muscle if you quit.
side note: this does not mean you won't get nervous or feel like you are going to throw up before you pitch or go on stage. I still get nervous.
2. Rich people know other rich people. Ask for introductions.
One year ago, I knew exactly ZERO Venture Capitalists or people with a lot of money. If you are asking yourself "how do I even meet VC's?", I feel you. That was me. Now I have a list. How? I met one - they introduced me to two, etc.... I created a Twitter account to start following VCs. They are all on Twitter. The platform will recommend others to follow once you follow one. Listen to them talk to each other. Follow them on Twitter and LinkedIn. Let me say this another way: DON'T SIT AROUND WAITING FOR SOMEONE TO FIND YOU. They will not. Make yourself visible. Put yourself in new rooms.
3. Create a stunning deck with headlines at the top of each one. Speak from a place of Authority.
Practice in front of your friends.
People do not read. All of us, including investors, are still like cavemen. Tell me ONE thing and show me a picture. If you cannot get your point across quickly, you need to work on your story. What does every magazine and newspaper have in common?
Headline + picture. All decks need to show: WHY, PROBLEM, SOLUTION, MARKET SIZE, TRACTION, ROADMAP, TEAM, WHY YOU, THE ASK. Even if you aren't raising, you need clarity on all of these things!
CONFIDENCE + CLARITY = CASH. (see point #1!)
4. Get all your docs and IP together.
Before people give you large sums of money they need confirmation that your business is set up correctly.
Documents of incorporation and intellectual property. The IP dilligence slowed down the process and added stress for me.
Have you trademarked your name? Is it owned by you personally or your C-Corp? Do you own your formulas? Do you have contracts in place with retailers and co-packers? Listen, no one starts a beauty brand so they can deal with paperwork. But if you don't set it up properly and document everything in the beginning, it will come back to bite you, or worse, slow you down. Part of fundraising requires you create a Data Room. This is nothing more than a google folder with folders inside.
5. Money begets Money.
When I first started the raise, many investors told me they "didn't want to be the first $500k". Nobody wants to be first on the dance floor. My shoulders were tense when after a few months of pitching I still did not have a YES. Did I doubt myself? YES. Did I quit? NO.
Say this mantra to yourself everyday: THERE IS A LOT OF MONEY IN THE WORLD. (cuz it's true)
What does working on your money mindset actually mean?
It means actually rewiring your brain to believe a new story about your relationship to money and your own self worth.
How do you do this?
You literally talk to yourself and write a new story. Not once. Not twice. EVERY FUCKING DAY.
I literally lied in my bed every morning and pictured the money already in my bank account.
I listened to a guided meditation every day that asked me to think about three things I wanted and be grateful they were already mine.
I'm 46 years old. The amount of times I have said the phrase "I'm broke" in my life is too many to count.
STOP STAYING SHIT THAT KEEPS YOU STUCK.
The most important story is the one you tell yourself.
Trust me when I tell you that whatever YOU (yes, you have control) put in your head, you will find proof that it is true. Especially the negative things.
Did you listen to The Nopalera Podcast episode with Linda Garcia? Stop what you're doing and listen to it now. (leave a five star review while you're at it:)
Don't even get me started on the "jenny from the block" syndrome! (where you think you need to stay broke to stay connected to your roots) I ranted about that over on Jannesse's Yo Quiero Dinero Podcast. I did the starving artist thing for decades. I'm done with that.
Back to the point...
Once I had a lead investor commit, all of a sudden everyone wanted to give me money. To the point where I had to say "NO, sorry it's too late for this round" to people. WTF. Literally weeks before I was desperate for money and now I was turning it down? WILD.
This is how I set out to raise 2MM but ended up with 2.7MM. Money begets money.
6. "Money is cheap. It runs out. Then what?"
This is something my lawyer actually said to me. The point here is when you take on outside investors they need to be bringing something else to the table besides their checkbook.
Reminder: There's plenty of money in the world.
Ask for the resources you want and need to grow your business. Define what you need BESIDES the money. Do you need sales expertise? Marketing? Industry connections? Some people asked me why I didn't raise through crowdfunding. The answer is NETWORK. I want the investors network and resources to help us grow.
