When I was younger I spent a lot of time around the music industry. Back then bands would set up in a garage and create demo tapes to send to clubs and managers. There were guys who worked at record labels called “A & R men†(artists and repertoire) whose responsibility was scouting for talent. I remember an important lesson I learned from one of these cats. His desk was always brimming with new cassettes from bands all over the country, so while he was on the lookout for a new star, he had to manage his workload by instituting a process that said – give me a reason to trash this tape.
For him, the reason could be the band forgot to rewind the tape, mislabeled it, didn’t provide good information, or just looked sloppy – whatever instant recognition it would take to pop the tape into the trash rather than the player. The lesson here as it relates to raising capital is make sure your executive summary or loan package is tight and well thought out.
Investors and lenders are busy people and do not like going down blind alleys that end up nowhere. The prospect might be well meaning, but if they haven’t gained enough insight into how the process of attracting capital works, they need to go back and do more home work. This is why businesspeople who have successfully raised equity capital or secured debt financing are going to have a leg up on the competition when it comes to funding a venture.
Marketing for money is another version of marketing for sales. The more you know and the better you execute will increase the chances of success. Make sure you always give the best first impression. In the capital markets when an entrepreneur is introduced and they are a jumbled mess, it telegraphs deeper issues regarding management and capabilities.
Here are a few tips;
1. Every single item you hand someone should have complete contact information
2. Go the extra step to use quality printing and paper materials
3. Tell your story in a expert fashion (which means have a story)
4. A reader should know in 3 sentences what they are looking at
5. Use your connections to find a good connection
6. Pay attention to the details, don’t slough over doing the extra work
7. Be on time – both figuratively and literally