I recently heard a great line that got my mind ticking over: “When you’re not paying for the product, you are the product.”
It got me thinking about the whole model so many of us web entrepreneurs work upon, and it wasn’t long before Facebook cropped up. It is of course the poster child for web entrepreneurs – but it’s only in hindsight that it’s a ‘too big to fail’ example.
Long before Mark Zukerberg took the king of the social networks to Wall Street, there was a bounty awaiting.
Members of the old school simply could not understand how a free social media network could possibly make money on the scale commentators were suggesting. So for that reason, and a few others, its launch to the market was a bit of a flop. However, three years on from their IPO, Facebook is now considered by some as a ‘blue chip’ investment.
Valued at $38.23 on it’s first day on NASDAQ, today Facebook shares are trading at $75.40 – Zuckerberg retains 22 per cent ownership, and is worth $33.1 billion.
Of course the point for most entrepreneurs, and indeed anyone with a business idea, is not to get “Zuckerberg rich” (though who would say no?). The point is to see your vision come to life, be your own boss, realise a dream, be creative, and of course, make enough money to pay both your staff, and yourself.
So you’ve got the mind map, you’ve got the vision – the first step big towards the dream though, is raising capital – and actually obtaining it.
Whichever approach you take – be it through traditional lenders, angel investors, or even crowdfunding – you have to be ready to answer basically any question that comes your way, and there will be A LOT of questions.
Here are my top tips for things to keep in mind:
- Know your own plan
Yes, your plan will change one hundred times, and so it should. The fundamentals though, will stay more or less in tact. Don’t know your numbers back to front? Get someone to help you. Your (accurate) future projections is the currency of credit providers. And money talks. In the initial raising capital phase, your business plan will be poured over by those with the money, and you need to have it all there on the page. Don’t make the approach until you’ve got this part nailed.
- Don’t get discouraged
So what if the first, or the fifth lender your approach says no? Knock-backs will happen, and you need to learn to take it in your stride. Seek to understand the reasons why creditors are saying no, and just as importantly, be prepared to make necessary adjustments.
About the author:
Colin Porter is the publisher of Dynamic Business and the founder and MD of credit reporting bureau, CreditorWatch. He has over 20 years experience as a business owner, specialising in general small/medium business issues, cashflow, credit management and online business. Follow CreditorWatch on Facebook, Twitter and LinkedIn.