Raising Capital

Three Insights to Become a Master at Raising Capital

By Jen Maldanado

I strongly believe that the United States of America is one of the wealthiest countries in the world. There are trillions of dollars flowing through our economy. Each of us has the opportunity to tap into that abundance while increasing investors and personal wealth. Each of us.

Imagine that your phone ringing constantly with more calls and money than you can handle for your deals or other’s people deals. Investors are offering you hundreds of thousands or millions of dollars to invest in projects. The #1 reason for not receiving and tapping into this abundance is because you might be getting the art of raising capital wrong. If raising capital without sounding pushy, discounting, or feeling like you’re selling is something that you are eager to learn, read these three insights below.

Have you ever considered yourself a salesperson? I struggle with the term “sales” because of the connotations “sales people” have. Personally, when I approached raising capital as selling I used old-fashioned, cheesy “sales training” tactics that I learned from well-known trainers. This mindset made me look like an amateur, pushing my prospects away. Don’t get me wrong, I learned a lot with great sales training. however, after messing up conversation after conversation with potential investors – the #1 lesson was that the ability to influence ourselves and others is much more important than the outcome than any sales tactics.

Don’t get me wrong, sales tactics are critical to the process of raising capital. As a high-performance coach, I advise every real estate investor and business owner to learn about sales. However, if you haven’t approached potential investors in such a way that you blow their mind and they are eager to work with you, then you’ll have to use old-fashioned sales tactics. After so much work, you’ll find out that it doesn’t work effectively if you don’t approach investors in the right way. The lesson #2 – there are better ways to interact with investors that will make them want to work with you. It has to deal with the pitch and the value that you bring to their wants and needs.

Once you have your mindset and approach, the process of creating healthy and mutually beneficial relationships with investors is pretty smooth. This is what I called my MAP formula. Mindset… Approach…Process.

So…Do you want to become a money magnet? Read the formula below that I’ve used to succeed beyond the norms over the long-term to raise millions in a very short period of time.

 Insight 1) Learn how to influence yourself and your investors.

Start by shifting your mindset about raising capital. Whether you are raising money, you are a parent, or simply a person trying to relate to other people, influence is one of the most important skills you can master. It can literally enable you to shift your quality of life and those who you care about the most. If you come from a place of deep caring to develop strong relationships with investors or people overall; if you look for their deepest needs, not just what they say they want, but what their gut level wants and needs – and you help them to meet that, there will be no limit to the money you will have access to, your income, the joy and the deep friendships you have.

  • Here are two critical mind-shifts necessary to influence yourself:
    1. When you are working with investors remember that you are giving them an opportunity to invest in a deal. You are not begging for money. The moment that you are making it sounds like – “please invest in my deal”, this will make you seem needy. Investors don’t work with needy people. If you have a real deal, then you should not have a problem raising the capital. The challenge is that you might be overlooking their needs and wants.
    2. Overcome the fear of being rejected. If investors say No, they are not rejecting you. Of course, I’m assuming that you did a quick pre-qualification and you know that they have the money.

Investors will say No to your deal because they have a few questions that have not answered. For example, a question like: Can I trust you? Do you really have my best interests in mind or are you just here to make a sale? Can you prove it? Will it really give me what I want and need? Do I really need it now? Make sure to answer these questions for them. Most of the time we are so eager to show everyone about the deal and what we have to offer that we forget that this is not about us.

 Insight 2) Be authentic and concise when approaching investors.

As a professional who raises capital, the goal is to build a relationship with your investors and help them make the best decisions with integrity. There are psychological principles on how to structure your conversations to blow their minds and make them want to work with you. However, don’t forget something simple – they want to know that you are for real and you mean well for them. This is a simple way to earn trust.

There are many places where you can approach investors like networking, phone calls, social media (Linkedin, Facebook, etc.), referrals and more. My favorite way to approach investors is through networking, speaking engagements, and referrals. I love to keep it “old school” because when you are asking for millions, it is the most effective way.

Here are five notes about approaching potential investors during a networking event:

  • Set an intention after the meeting to follow up with a coffee, a phone call or any other short conversation. Make sure to follow up when you say you were going to follow up.
  • Prepare your mindset and get yourself in an empowering state. People will remember how you make them feel and that includes the energy that you are projecting to them.
  • When introducing yourself, keep it short and concise. Remember to have a great body language and make your intro about how you add value to investors not about how great you are or how much money you made in the past deal. You are there to get the contact information and raise their interest, not to sell.
  • Always ask them about what they do and which type of deals they’ve been involved in and how much they put in. The purpose of this question is to pre-qualify them. Ask them about what is that they are looking for and see if this is a person that you want to connect in the near future.
  • Find a way to add value to them with information, connections or other ways. Don’t start your relationship with selling right away. However, if they are eager to get into a deal, ask them what they need to know about the deal, their level of experience and match them with opportunities.

 Insight 3) Have a system to raise capital.

The most successful capital-raisers have in common one thing – all of them follow a system to raise capital. We are talking about a process to increase their investors’ list, understand their needs and wants, close them and even send them cookies or brownies on their birthdays and anniversaries. Having a system in place that keeps you connected and brings business to them will make a huge difference on how much capital you raise. Adding this item to my list brought me from raising 50K a month to raise 1 million in less than 30 days.

  1. Here are some tips to include in your process and system to raise capital:
    1. Have a methodology to increase your list of investors and a way to get in touch with them consistently.
    2. Always…Always…Always… consult with a lawyer to have the proper legal documentation in place depending on the type of investors (accredited or not) that you are presenting the opportunity to. There are many deal structures but the most common ones are debt with a first lien, quartered notes, equity partnerships and syndications.
    3. Prepare a great pitch so the close becomes no-pressure, no stress, and automatic for every different occasion. For example, have a pitch on how you present your deal into a networking event, another pitch for how you talk in the phone with people that you don’t know and one for people that you know. However, this pitch is different from your elevator pitch where you are presenting yourself.
    4. Have materials ready to present to investors but don’t give them all the information until you qualify them through questions and they do what they say they will do.
    5. Have a follow-up call or email right away after you finish sending them the information. Setup a meeting with them on that follow-up and ask them to come prepared for that meeting (for example – please, read all the materials and have all your questions listed).
    6. Have a closure procedure. Make sure that you get all paperwork completed and return to them.
    7. Welcome them aboard. Make sure to provide all contacts necessary to answer any future questions. Ask them to copy you on any communication if necessary to make sure that service is being provided properly.
    8. Keep in constant communication.

If you have questions or want to learn more how to master the art of raising capital, feel free to reach out at jen@jenmaldonado.com or schedule a 30 minutes free coaching session here: Schedule Time with Jen