Saturday, February 26, 2011

The Crying Entrepreneur

I so often see posts on social networks, most notably LinkedIn as it is the most widely used for the topic, wherein entrepreneurs seem to be crying about not getting funded.

Threads like this cause me to cringe as they clearly demonstrate that those
in opposition, clearly have no concept of the world of raising capital.

Whether you're going public with a Wall Street Firm, doing an M&A Deal, or
a myriad of other ventures, you're going to pay up front, even if they are
taking a slice. It happens on Wall Street every day.

For some reason, there is a rumor out there that this isn't so. It is.

Who else will pay for all the legal work? Many young ducklings suppose
that the legal work they've done (if any) is sufficient. It's not. It's
not even close.

The mere fact that people post deals in this group, is enough proof that
folks don't have a clue about deals and how they are done. There are more
SEC Violations in LinkedIn groups than there are people active in them.
This one is no exception.

Perhaps an even larger misnomer is that a private company is exempt from
Securities Laws. They are not.

The biggest mistake, however, is the entrepreneur who simply believes that
just because he has an idea, that the investment community owes it to him
or her, to consider their deal. Possibly an even bigger laugh, is the
number of times you read, "game changer," "Revolutionary Product," or some
other mangifyer for an idea. The non-investment side would probably
cringe if a film were played when they use such an expression, with someone
with a like idea, stating the exact same thing.

Are there finders out there that don't charge upfront? I suppose so, but
they are not that widely acclaimed, nor effective.

While many will send me an unsolicited proposal (some will even send mail
via linkedin, though I don't answer LinkedIn Mail) simply because our
network has a rather large percentage of millionaires & billionaires and we
generated several billion in funding just last year and the year before and
are now in our third decade, we are not a finder, simply a network. Do I
know capital sources? Yes. Will I take some Joe Schmoe from an email
group? No. A network is the most powerful component an entrepreneur can
have and a LinkedIn profile doesn't count as a network. A network is a
group of people you know personally and knows you right back.

As I wrote in an earlier blog post, many VCs get 20-40 unsolicited proposals per day.  That's up to 200 per week!   Can you now begin to imagine how much man-hours it would take to not only read through poorly written proposals (less than 10% are good), but to analyze them, then pursue due diligence?

This should be done for free, in the eyes of most entrepreneurs.   Especially those who haven't a clue as to how to get the attention of an investor, let alone attract it like a magnet and to compel us to open our wallets and write a check.

Dave Phillipson, CP
CEO Space
The World's Largest, Oldest & Most
Successful Organization for CEOs,
Entrepreneurs & Visionary Investors

P.S. Those that know me, understand there's not much that gets me as excited as helping a fellow entrepreneur. I'm passionate about sharing my resources, knowledge, and elite connections in order to build business cooperatively. 

I do this by receiving referrals from people like you. Who do you know that's a business owner and wants to grow with strength & velocity?

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