Raising capital for a home business is tough, and with the current economic climate, it’s tough now more than ever. So what can you do to raise the money you need? Here are a few tips from Tamara Monosoff, founder and CEO of mominventors.com.
Know that raising money is a full-time job.
Raising money takes a lot more effort than many people realize before they start their business. From finding investors, to preparing presentations, from listening to feedback and communicating with investors, to juggling paperwork, raising money can be a job of its own. Be ready to dedicate much time to raising money.
Get expert help.
Many terms are used and thrown around that the beginner home business owner may not be familiar with. Capitalization, dilution, warrants, preferences, convertible notes, and valuation are all terms that need to be known, among others. If you’ve had no prior experience with these terms, be ready to hire an expert that will help you sort out their meaning.
Prepare for the emotional toll.
Psyching yourself up for a presentation is only part of the mental preparation needed when trying to raise money. You must believe every presentation will be worth the time and effort and you must be enthusiastic. However, investors hear dozens of pitches a week and few ever receive funding. Be prepared to hear “no” or some variation of it most often.