To raise money you must be able to raise an investor's heart-rate. This requires inspiration and purpose.
I have coached many clients through the fundraising process, and taught groups of people to build and deliver effective investor pitches. In the past I have also pitched many investors myself…from traditional VC’s to large banks to the entire executive team at Microsoft. To fund my last startup my co-founders and I raised over $30 million in 3 months, closing the round with investors still trying to get in on our ‘book’.
With all this experience, I have come to one conclusion: That effective fundraising has very little to do with the idea. Certainly, some ideas are better than others. There are also better business plans, founding teams and ‘timing windows’ for certain types of business. When an investor makes a choice they must consider a number of key factors, but in the end I don’t believe that an investor pulls the trigger because of any one technical consideration.
In the end, I believe investors put their money at risk because the feel good about the future of your enterprise. They feel at a gut level that your business is going to be successful, and this energizes and excites them. Their rational minds do the screening, but their hearts and guts do the decision making.
Consider that the awake, thinking part of your brain only 5% of your mental processing power. The other 95% is subconscious. Also consider that your heart and gut have just as many nerve endings as your brain has neurons. When you make a decision you may think you are making it from your rational brain (the 5%), but in reality you are incorporating your subconscious and your entire body into the process. You FEEL your way through decisions much more than your logical mind wants to believe.
So if you want to raise money, you must be able to raise an investor’s heart rate. You must be able to inspire. Your idea needs to be good, certainly, but your pitch needs to be even better. The story you are telling should include why you are doing what you are doing, how it has meaning in the world, and what, in the end, you want to accomplish. Your reason for embarking on your journey must be resonant and moving…not flat and technical. "Making money" won’t do it. "Changing the world" will.
Money is energy…it is a reflection of your larger intent. Getting a large amount of money means having a large, purposeful intent. I have seen people with ridiculous ideas and virtually no plan raise HUGE amounts of money through sheer inspiration. I have also seen people with amazing ideas and plans fall completely flat in a lackluster investor pitch. If you want to attract money, attract people. If you want to attract people, become an inspiring and purposeful person.
As you move yourself you will move the world…and money WILL follow.