Lets face it, Investors and Entrepreneurs are like single girls and guys who find it hard to meet their right mate. But instead of emotions, you’re playing with money.
When the 200-page business plan has been looked at (180 pages are irrelevant), the exaggerated resumes of the management team have been assessed and all the pleasantries and questions asked, the core questions boil down to: "Do I believe in this CEO? Do I believe in the visionary of the concept? Is there a connection here? Is there an investment-chemistry?"
It’s not so easy to find a good match between an investor and an entrepreneur.
You Are Not Denzel Washington
A girl who is slightly desperate and single with no potential prospects on the horizon, will often say, “There are no guys that are up to my standard (high squeaky voice).” The guys say, “There are no girls up to my caliber!”
OK HOLD ON! There’s a big disconnect going on here. Either someone thinks they're Denzel Washington when they’re really Munya Chidzongo, or they’re just not looking in the right place.
I agree that the worst thing you can do is settle, but you’re not going to get a capital injection of US$ 2M dollars when there’s just a concept on the table and still retain 70% of your company. It’s highly unlikely. Look where your at, set a boundary of how much you want to give away, then put it in writing and be willing to negotiate around a piece of cake.
Most foreign investors have high expectations of return and dream of putting capital behind a project or concept that they’ve seen work in another economy.
There are investors who wave their fund figures around, only to tell entrepreneurs that things are too risky in Zimbabwe. Well they should leave and stop reminding young entrepreneurs that there are crooks and economic challenges. We already know this. Angel investors in Zimbabwe cannot expect third world returns in a first world way. It’s a more than a little different.
Many young entrepreneurs dream of getting that quick capital injection.
There’s an idea out there that the cash will take away all the issues. But it will actually pile them on. No investor has excess cash that they want to waste, and they won’t waste it on you. Before, when you had a humble little cash flow with a limited amount of stock, the only people you had to answer to was your wife and your accountant. Now, you’ve got people breathing down your back eager to see you perform so that their investment does exactly what YOU SAID it could do.
It’s all good and well to pitch an idea with great looking figures. It’s another thing to make the figures turn into dollars. I know this very well because I’ve done it before. I’m trying to use my massive failures to help you when wrestling with the type of investor you sweat for. You want to get the investors who will help you with your model, and expansion. Build organically as far as you can, and then get an investor who will contribute.
The Thinking Paradigm
The whole thing is to know how the girl thinks, and how the guy thinks. How the investor thinks, and what the entrepreneur is thinking.
Do you believe in yourself? I’m not talking about a fictitious pseudo belief where in public your tie is straight and your walk is strong. I’m talking about when you’re alone and you’re in your pajama’s looking at the mirror at your character. When it come’s down to it, are you the Linchpin in the business? It all falls and rises on you. The economy may be unstable but at then end of the day you have to make it work. Investors can see through the “Bull Pile”, right to your true belief in yourself or lack of.
Are you willing to go the extra mile? Angels in third world nations often have to hold the hands of entrepreneurs to ensure their return. I’ve invested in great minds and high-degreed individuals only to get a bitter partner who still hasn’t dealt with all their racial issues. I cannot win there. I’ve also invested in uneducated young and character-filled youngsters who’ve given me the greatest joy and return for my company.
Investor or Entrepreneur. Don’t say that "things are slow," and there are very few opportunities out there—that's a perspective, not truth. At the same time, don’t rush into investment relationships based on pure clout and raw looks.
Rushing into any relationship will leave you with a broken heart.
(photo via david reid)
Posted on July 1, 2013
by Tim & Tommy filed under