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Here are four ways to leverage your network to raise capital:
No. 1 – Don’t hesitate to ask people you know for help.
This seems obvious, but many people are too afraid or too polite to do this. If you believe in what you’re doing and think you’ll be successful at it, you’re offering people a good opportunity. So you have to nothing to fear or to be embarrassed about when asking people you know for money to invest in your business.
In fact, if you don’t feel comfortable asking your friends, relatives, former colleagues, neighbors and anyone else you know to invest in your business that may be a sign you don’t have what it takes to be an entrepreneur. A successful entrepreneur has no fear of asking people for money. That doesn’t mean you should be rude, careless, or in any way misrepresent the opportunity, but you should be confident enough in what you’re doing to feel proud and excited to offer people you know the chance to participate in it.
Caplinked can help with this process by giving you a private, secure deal room that you can use easily to share your deal with people you know and track who looked at it so you know how and when to follow up with people in your network who might be interested.
No. 2 – Don’t give up so easily.
This also should seem obvious, but many people are way too easily discouraged and give up if they don’t quickly succeed at raising the amount of capital that they think they need for their business.
Legendary entrepreneur and current owner of the Dallas Mavericks Mark Cuban once said that most businesses can be launched initially with a lot of sweat equity and a mere $10,000. Pretty much anyone, even with a creative use of credit card debt, can put that together.
After that, it’s a matter of hard work and building one step at a time. If you can’t raise as much money as you want right away, don’t give up. Take what you can get and start doing what you can with that money, your own labor, and help from friends, family, and others who believe in what you’re doing even if they don’t have money to invest right away.
Caplinked can help with this as well. You can keep everyone who is involved with your company easily updated in real time using our secure, private company reporting features.
No. 3 – Leverage your entire social graph and extended network for help.
This one is not so obvious. Basically, you need to go beyond the people you know well and ask them to reach out to other people who are close to them but who may not be close to you. These second-degree network connections can lead to some surprisingly powerful results that you may never get just focusing on the people in your inner circle of contacts.
Using a Caplinked deal room to share your deal can help with this process because it allows your contacts easily to share your deal (subject to your stated confidentiality provisions) with anyone they know and at the same time allows you to keep track of everyone, including people who viewed the deal indirectly through someone you know, who viewed your deal and when they viewed it.
CapLinked allows you easily to know who is interested and follow up with all of them directly even if they were not originally on your list of top prospects to be interested in your deal.
No. 4 – Remember that raising capital and other resources for growing your business is not like throwing grenades or playing horseshoes. Getting close doesn’t count.
Sometimes entrepreneurs are satisfied to just get prospective investors or other people who could help grow their business to provide moral support and advice. While this is nice and advice can sometimes be helpful if it is specific and coming from someone who is an expert in a certain area, if what you need is capital or more tangible help you should not be satisfied with this result. You should keep pushing each prospect to get what you want, whether it is capital, a formal endorsement, a commitment to provide their labor, or other resources until you get it or you get flat out turned down.
Again, this is not at all to say that you should be rude or abrasive, but you should be extremely persistent and resilient. If getting a door slammed in your face or feeling like you’re begging someone for help bothers you, you may not have what it takes to be a successful entrepreneur. Caplinked deal room and company features are helpful for keeping track of all your prospects, the status of their responses or lack thereof, and for gently reminding them of your continued requests for their attention and assistance.