Ramping Up to the Next Level by Brian CalifanoRaising money is an art, not a science. As entrepreneurs grow their businesses, they ultimately hit an inflection point where initial investments from family and friends and cash from operations only take the business so far. You’ve been chipping away with a pickaxe — and now it’s time for an excavator.

The next level requires a different strategy, mentality, and action plan. Ramping to the next level requires more hustle, forging relationships with people or entities that can help the company scale. If you are one of the thousands of entrepreneurs and companies that need funds from public or private sources, here are some things for you to think about:

        1. Know the Key Performance Indicators (KPIs) of Your Company: Understand that one of the first things that investors are going to want to know is: “What’s in it for me?” This is the time to go into sales mode. What is it about your business that the investor or strategic partner cannot pass up? And what is the exit strategy that will enable the investor to realize a good return on investment?
        2. Figure Out Your Ideal Partner: Besides access to funds, an ideal partner should know your business and understand how to best fill in your blind spots. The business owner cannot be all things at all times. Think about what skillset(s) will complement yours. 
        3. Know How to Spend the Money: Have an ideal plan on how much you need and where you would spend the money to maximize the valuation of your company.  Potential investors are turned off by having entrepreneurs ask to invest in them and they don’t have a clear plan in mind on how to utilize the funds.
        4. Addition by Subtraction: Ask yourself: What means more to you as a business owner? a) owning 100% of a company valued at 1 million or b) owning 33% of a company with an expected valuation of 15 million in 36 months? Most entrepreneurs view their business like their children and are reluctant to part with a significant ownership stake in their company. However, a true partner will add value to your business if they have a significant enough stake in its success. Don’t view selling a stake as losing equity, but rather as increasing the value of your equity stake and the company overall. 

We know that this stage in the lifecycle of a business can be both exciting and frustrating. Here are a few things to keep in the forefront of your mind as you push towards the next phase of your business:

        • Be emboldened.
        • Focus on what you do have.
        • Ask yourself the right questions to get, and stay, focused. 

Take-away: If you’re at a crossroads in your business and need advice on how to gain access to capital either through equity or debt sales, reach out to Brian at  info@acceleratingcfo.com.

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