Each week, my email inbox includes several inquiries from entrepreneurs who are looking for startup or growth financing for their businesses.
Typically, the first email is polite and conveys a sense of excitement about his/her product innovation. Most of the emails include a request for a referral to appropriate funding sources.
Some information to provide CONTEXT: The Service Industry Fund that I founded in the mid ‘90s has invested over $1 Bil in scalable service firms. When a business plan comes in that doesn’t fit that FUND, our intermediaries can “shop” for funding from other sources. Plus, since one of the primary challenges to sustained growth is funding, my 35 year old growth strategy firm has helped hundreds of our midsized privately-held consulting clients to obtain appropriate growth financing.
So when I receive a financing inquiry, I provide tailored responses based on the information provided in the initial email ….and then frankly, we brace ourselves for the replies. Last week, I forwarded an email inquiry directly to a past client who is poised to invest several million dollars in the right deal. In the same email I asked the entrepreneur if he had contacted the Technology Council in his state because several have well financed startup funds or angel networks. His product concept would go over very well at NJTC’s JUMP START. You would have thought I called his mother a whore.
It is amazing how many times entrepreneurs will:
- Immediately dismiss a suggestion (no matter what it is, by the way). That behavior is insulting to the resource person who has generously taken the time to read, think and offer advice (for free)… and is a disincentive for any future interaction…let alone funding!
- Provide a detailed history of their past accomplishments that has an arrogant or defensive tone. Many entrepreneurs are quick to feel insulted, misunderstood or unappreciated. Hello! It’s an email inquiry and response between people who do not know one another. Plus, funding is about the enterprise, the potential to make money, market need or demand, etc. Investors don’t fund the entrepreneur’s ego.
- Not express gratitude for the prompt response or informed suggestion. Most intermediaries and funding sources do not respond quickly or provide tangible suggestions…partly because so many entrepreneurs aren’t polite, act entitled, or think they can demand attention.
- Make grandiose claims that their concept is “the next Google”… “bigger than APPLE”… Huge claims like that backfire on entrepreneurs. Real funding sources involve industry experts during their due diligence and will make their own decisions about the significance of the innovation.
- Declare that their unproven concept deserves millions of dollars of outside financing. These entrepreneurs are often the same people who think they can refuse the addition of investors to their board(s) and haven’t invested huge sums of their own money in the concept.
I wonder how many innovative products are not adequately funded because the arrogance of the entrepreneur gets in the way. You can tell a great deal from the second email how a funding search is probably going to turn out.
Known as The Growth Strategist®, Aldonna Ambler built and grew a suite of companies to help midsized B2B companies achieve accelerated growth with sustained profitability® A Certified Speaking Professional (CSP), Ambler has addressed over 2000 audiences and hosted a syndicated online talk show about growth strategies for 9 years. As a growth financing intermediary, Ambler raised over $1 Bil dollars for midsized companies. The winner of over 2 dozen prestigious national and statewide "entrepreneur of the year" awards, Ambler is available to speak about “profitable growth during any economy” and/or serve on the board of a growth-oriented privately-held company.