How Do I Raise Money For My Business?

You’ve got a business idea you believe in, but every time you think about getting started, the same question stops you in your tracks: where will the money come from? It can feel like you need funding before you can build anything, leaving you stuck waiting for a breakthrough that never seems to come.

• 0:00Speaker 00

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• 1:00Speaker 04

  Nearly every week, I get asked a version of this question, and it sounds like this. I have a great business idea. How do I raise money to get it started? Now, my answer might surprise you because most people think that the money comes first, then the business. It's actually the opposite. Today, I want to walk you through how funding works, who invests, why they invest, and what they need to see from you. And specifically, what is the first question almost every investor asks when they're looking to invest in a company?

• 1:33Speaker 04

  Welcome back to the $100 MBA Show. I'm your host, Omar Zenhome, where I deliver practical business lessons three times a week, Monday, Wednesday, and Friday, to help you start, grow, and scale your business.

• 1:46Speaker 04

  I got a quick favorite ask. If this show has helped you in any way, leave me a quick review. You could do so wherever you listen to podcasts. This helps me and my team reach even more people who need the same no-fluff, practical business advice that you're getting from the show. It only takes a few seconds, but it makes a huge difference. Thanks for being a part of our journey to help others on their journey. To help me answer this question, Nicole is here on Q and A Wednesday. Nicole, good to have you.

• 2:15Speaker 05

  Hey, Omar. Great to be here. Let's get into today's question. Today's question comes from Justin. Justin asks, I have a business idea I really believe in, but I do not have the capital to get it going. How do I raise money for my business? Where do I even start? You know, I was at a cafe the other day and I overheard two people asking and talking about this exact question. I know you've got strong opinions, though.

• 2:38Speaker 04

  I do have strong opinions and I want to make sure that people understand. I want to preface that the reason why I have strong opinions about this is because most people get this wrong. And most people never actually build their business because they get stuck at this step.

• 2:52Speaker 05

  Yeah, that's right. And if I'm going to play the role of Justin here and ask the question he's probably thinking, how much money do I even need to raise?

• 2:59Speaker 04

  That is a very important question. Most people, they have like some number in their head. They're like, I need $50,000 for this business. And whenever I probe a little bit and ask like, why $50,000? Why do you need 50? Why not 100? Why not $20,000? And they really don't have an answer. They're just like, they have this nebulous number. So you really need to understand why you need the amount that you're asking for. You really need to break it down line by line. What are you going to be spending this money on? Is it equipment? Is it hires? What kind of hires? How much do these hires cost? Is it marketing spend? Is it ad dollars? You need to have an actual budget of what you're going to be spending these investor dollars in. Now, the reason why I think this exercise is really helpful is because most people, when they do this exercise,

• 3:44Speaker 04

  they realize, oh, I actually don't need that much money. I can actually get some results with less money.

• 3:50Speaker 05

  Yeah, it's almost like if money will solve all my problems, but they're not actually being specific as to, A, maybe what the problems are, and then what they would actually use the money for. So breaking those items down or being very clear about what I would put that capital towards is super helpful.

• 4:07Speaker 04

  Yeah, and I want to give a good example so people can understand. A lot of people, when it comes to business, they think differently about things when it's actually like anything else you buy. Like when you invest in a vacation, when you invest in a new outfit, well, let's go to the vacation parlor. You're gonna go on holiday. Do you start out by saying, "I need $30,000 for a holiday"? No, you don't. You say, "I want to go on holiday. I want to go to a beach. Where are the beaches that are close to me? What is a place I want to go that I haven't been before?" And you start budgeting out, "How much money do I need for this? Well, if I go to Costa Rica, this is how much it's gonna cost me to get on a flight. Is there another way to get there? Do I need to rent a car? How much are the hotels? Am I gonna go on excursions? What about food?" Like, you start realizing how much this is gonna cost. You break it down so you can figure out, "Can I afford this vacation?

• 4:52Speaker 04

  How much is it gonna cost me? What are the alternatives? What's the other version of my beach holiday? Maybe I can go somewhere I could drive instead of going to on a flight." The point I'm making here is that you already do this in your life. You should do the same thing in your business.

• 5:06Speaker 05

  That's such a good example. Like, that breakdown is so simple, but it's true. It's like they think about it in a completely different way.

• 5:14Speaker 04

  Yeah, and you have to understand that your business, when it starts, is version one. It's not version 500. Most people, when they think of business, they're like, "Well, I want to create the next Disney." Right? Disney is a multi-billion, almost trillion-dollar business. So how do you think about it for your business? Well, you think about, like, how did Disney get started? Well, they started with like one short animated video with some characters, right? How much would it cost you to create one short animated video with a few characters? That's your version one. What's the version one of your business? That's all you need to kind of get started.

• 5:46Speaker 05

  And in addition to that, that breakdown is super helpful. What am I gonna do with that money? But another line item, maybe, that they need to think about, and I think you want to talk about this, is the investors are gonna want their money back. So how will I make more money so that the investors can get an ROI? A return on their investment?

• 6:04Speaker 04

  Yes. Well, that leads us to the next question, which is the question you need to ask yourself. What are you going to get in return for the money you spent? You have to see this as an investment. I'm gonna invest X amount of dollars. How those dollars... Is going to equal more dollars, right? That's basically it. Because the investor, at the end of the day, they're looking for the best chance to get a return on investment. Are you the best chance at turning their $50,000 or $100,000 into more than $100,000? Hopefully, you know, much more. Some investors are happy with a 2X or 3X return. Some people are looking for 10X. Some of them are looking for 100X return. So are you able to actually explain, "Hey, when I spend this money, you will get X amount back"? If you can't do that,

• 6:48Speaker 04

  then unfortunately, you're not going to get an investor. Just think about it. Put yourself in their shoes. Would you give somebody your hard-earned dollars if you knew for sure that the person on the other side had no plan to get your money back or to make more money out of that money? So think about it. So if I make a hire, let's say, for example, I'm going to make a hire. That hire is going to cost me $20,000 as a freelancer. What is that hire going to do for your business? How is that going to actually earn you more money? Is that the hire going to create a product for you that you could sell? Is a hire going to help you market so you can get in front of more customers? How many more customers? You've got to get that granular.

• 7:26Speaker 05

  Anything else?

• 7:27Speaker 04

  Yes. Again, we're talking about investors here. They are not making a donation, right? They are, even though they're called angel investors, they're not really angels. They want their money back and they want it with interest and obviously a profit. So you have to understand that, "Hey, if I'm going to spend this money, I need to have a formula, an exact formula." I'm going to give you an example. So when we were running our software company, Webinar Ninja, we got pitched by investors constantly that wanted to like invest in our company. We want to stay bootstrapped. But this is a good exercise, even if you don't want investors, so that you can understand what to do with your profits. Because your profit is something that you're going to reinvest in your business. So for example, with Webinar Ninja, we knew exactly what happens

• 8:12Speaker 04

  when somebody gets on a trial in Webinar Ninja. So people had a 14-day trial when they signed up. They had a credit card on file. They put their credit card on. They sign up. They have 14 days. After the 14 days are up, they get charged for their plan, okay? We knew that if we had 100 trials, we would get X Amount of customers every single time converting off trial. A conversion rate is about forty five percent. So forty five percent of our trials would become customers. So we knew every time we had a hundred new trials, forty five new customers. So how do we get more trials? So we knew that if we ran ads on Facebook, for example, and got extra, let's say, three hundred new customers. So now instead of a hundred, we have four hundred new customers. We would make a lot more forty five times four, whatever that is, uh, which is a hundred and eighty, hundred and eighty customers.

• 8:56Speaker 04

  We knew we'd get a hundred and eighty customers if we just put more fuel to the fly. But you have to know that equation. You have to know so that the investor knows that, hey, okay, if I invest X amount of dollars and those, some of those dollars are going to be invested in this way. That they're going to make more revenue and they're going to have more customers and there's going to be more growth and the company's going to be worth more. And then when they one day sell, I can have a bigger slice of the pie or get more pie out of my investment. So you really need to break it down to those exact numbers.

• 9:23Speaker 05

  And I suppose what you're saying there is you're coming in with a very clear ask for the funding. But also exactly what you're going to use it for and exactly how that's going to pay out.

• 9:35Speaker 04

  Yes.

• 9:35Speaker 05

  Yeah, so that clarity is really important.

• 9:38Speaker 04

  We had this discussion earlier before off camera about Shark Tank. Shark Tank is a good example. I really highly recommend anybody who's looking for investment to watch the show. It's cheesy and it's highly produced.

• 9:49Speaker 05

  High drama and all that.

• 9:50Speaker 04

  Yeah, but uh, one of the first questions they ask them is like, okay, what are you going to do with this investment?

• 9:56Speaker 05

  Yeah.

• 9:56Speaker 04

  Like, why do you need investment? You look like you're doing fine. And you know, some of them, they give a cheesy answer like, well, I need somebody who's going to advise me or whatever. But the ones that really get investment are the ones that have a plan like, hey, we need to scale our production. We want to lower our cost per acquisition for customer. Or we want to be able to license this product and we need, you know, those connections that you have. So this is the whole idea that by watching the show, you'll get some hints on what's going to be asked.

• 10:20Speaker 05

  Yes, and the numbers always have to be very, very clear there. So it's not like I need money for more sales. How many more sales and what's your proven sales method? Or I need money for marketing, like ads, as you mentioned before. Okay, what will the, you know, ad spend actually result in? Being very clear on their numbers. I mean, that always comes up in Shark Tank. Speaking of Shark Tank, though, uh, one of the, the things that always comes up is how do I prove that I'm worth investing? It's almost like an audition, right?

• 10:50Speaker 04

  Right.

• 10:50Speaker 05

  For investors, you feel that sense of I've got to prove to them that their money is going to be worth it.

• 10:56Speaker 04

  Yes.

• 10:57Speaker 05

  Spent on me and my business.

• 10:59Speaker 04

  Yeah. When it comes to money, people want to see evidence. Uh, and I'm going to give an extreme example. Sarah Blakely, who's the founder of Spanx, uh, is a billionaire, right? Built a credible empire on women's clothing and undergarments. Was starting a new business and she needed investors. Like she would have no problem getting investors. Why? Because she's successful. She's proven that she can run a successful business. She's built a bootstrapped, self-funded business that's worth over a billion dollars. Okay? If Jeff Bezos wants to start a new company and wants to get some funding, right? He's going to have a very easy time getting funding. Why? Because he, he's already has a track record that he can win, right?

• 11:34Speaker 05

  Okay, but those are really

• 11:35Speaker 04

  Yes.

• 11:36Speaker 05

  Out there examples. And I think what you're hinting to is, is traction, having some sort of proof that you're able to do this thing of business.

• 11:43Speaker 04

  Exactly. A lot of people are so hung up on their idea. Most investors, the vast majority are investing in you. They're not investing in the idea because they understand that sometimes the market will change, they'll shift. And they want to make sure that you're the right person to lead this company to, you know, maybe pivot with those changes, to change with the market, to improve your product, to be agile. So you need to prove in some way that you're the right person to back. You're the right person to invest in. And this is why the business comes first before the money. Because you need to show that, hey, I already have sales. I already have traction. I already shown interest or even I have built an audience around this product and they trust me.

• 12:25Speaker 04

  So you need to show the investor that you already have some wins and you're worth depending on. You're worth investing in, in some way. Even if that's like, I am an expert at this. I have a PhD in this, in this area. I have a unique experience because this is what I did for 20 years as in my full-time job. And now I'm going to take that experience and turn it into a product. You know, that is something for them to chew on, be like, okay, this person is something that I can rely on and see that I can win with.

• 12:54Speaker 05

  I thought traction was going to be a bit separate to being the person like they're investing in you, but I suppose you are the one that's showing capability of delivering.

• 13:05Speaker 04

  A thousand percent. And one of the first questions they ask on Shark Tank is, how many sales have you made so far, right? How much money have you made so far with this business? They want to see, is there a validation in the market for this business idea, this product? Are you able to get it to a certain point on your own without my involvement? Why? Because Mark Cuban is busy, right? All these sharks are busy, right? They don't have time to like hold your hand. They're probably going to give you an hour every three months or something like that of their time. So the point I'm making here is that you need to show them that, hey, I am able to win at this level. I need to take it to a next level. And this is why I need your help. This is why I need your dollars. This is why I need your expertise, or whatever it might be. So you need to have some traction of some sort.

• 13:47Speaker 04

  And this is why, even if you have a version of your product in a different form, let's say, for example, you want to create a software and you need funding for the software, you know, hire some developers, or you're not a tech founder, but you have a service version of this product, of this solution. Like you create a service business that solves a problem. Now you want to turn that into a like a ready-made solution with software. That's a great kind of way to show, hey, I've already have traction with the service. I'm solving this problem with the service, but now I want to leverage this, scale this with software.

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• 14:46Speaker 00

  What do I gift my mom and nieces?

• 14:47Speaker 01

  Walmart has top brands you know, like Ninja, Disney, Lego.

• 14:54Speaker 00

  Oh, Dad loves music.

• 14:55Speaker 01

  Sonos can bring his songs to life. What sound that hits just right.

• 15:02Speaker 00

  And my coffee-obsessed bestie?

• 15:04Speaker 01

  They love his brews coffee right for mornings extra bright.

• 15:07Speaker 00

  All those great brands at Walmart? Who knew?

• 15:09Speaker 01

  We knew, now you do too.

• 15:12Speaker 02

  Shop gifts no love at Walmart.

• 15:17Speaker 05

  Traction is what we're looking at here. So aside from the big examples of Sarah Blakely and Jeff Bezos, Justin, he has traction. Where does he actually go? I know that I remember thinking in the early days when we started our business, investment firms and even angel investors, they seemed a little bit out of reach or intimidating in some way. So can you give him some practical places where he can go?

• 15:42Speaker 04

  Nicole and I have a friend named Grant, Grant Merrill. Shout out to you, Grant. Love you. You need to channel your inner Grant Merrill. Grant is one of those people that loves meeting people and networks. And like Grant will have no problem raising money anytime he wants to. He's just, he's just that kind of person that is always at the events, always are at the parties, always saying yes to things. And you need to start doing more of that. And I understand that sometimes that's out of your comfort zone. That was me in the beginning as well. Like, I don't feel comfortable always like trying to be at the party, at the meetups. But there are opportunities for you to meet people that know people. Like, maybe the investors won't be there at the party, but there's going to be other people like Grant at that party that know investors that can open doors for you.

• 16:24Speaker 04

  So literally, go to meetup.com, go to eventbrite.com. Look at all the local events that are happening. A lot of these events are free. Some of them are low cost, $5 entry, whatever it might be. Some of them are just like cocktail hour. Some of them are just a meet and greet. Some of them are at coworking spaces where they're trying to promote the coworking space, a pitch night, whatever it might be. Go to as many of these events as you can. Even just say, hey, I'm going to go to one event a week for the next six weeks. And just show up. And then there, just introduce yourself to a few people. Get to know people. Ask them questions about what they do. Learn. Do they have investors? Okay, you have investors? How did you get investors? Who are these investors? Cool. And your whole idea is not to like, I'm going to close a deal or I'm going to get an investor in six weeks. The idea is just like, you're starting this process

• 17:09Speaker 04

  of being a person that is out there in the world, that is available to meet other people. Because one day, the people that you're going to be talking to will start to like what you do and understand what you do and start introducing to other people. But it starts with that first initial, you know, Showing up to these events.

• 17:27Speaker 05

  And I would even say, like, if it's, I don't know how super early we're talking about here, but those early events that in those first meetups that you might go to, and maybe you don't have that gregarious outgoing personality, even just listening to the conversations, listening to the language, listening to the way people are talking about investment and how it all plays out. That is, to me, that was one of the first things that I even just was happy about. As long as I'm around those conversations and starting to absorb that language, I think that goes a long way eventually to that confidence of having those first conversations.

• 18:02Speaker 04

  Yeah, I mean, I'm gonna go back to Grant. We met Grant first time, maybe like six years ago, at a SaaS conference called SaaS Stock in Sydney. And we basically just met at the, where the sponsors are and all the booths and we're gonna walk around and talk.

• 18:17Speaker 05

  It was actually, we were looking at all the different vendors and trying to decide. Who's got the best swag?

• 18:22Speaker 04

  Yeah, and we're just joking around, have a good time. I left that day with Grant, asking myself, why was it fun to hang out with Grant? What was about Grant that I enjoyed his company? So the next time I hung out with him, I just noticed that Grant asks a lot of questions. He doesn't actually, you know, sit there and give his life story and give all his best tips and give all this unsolicited advice. No, he actually just asks questions to learn more about you, and people love talking about themselves. You know, so you start sharing your story, he learns more about you, and then he just seems like an interesting person because he's genuinely curious about what you do. So you could just be Grant and ask good questions. Just ask questions about what they do, why they do it, what was the initial motivation to start this business in the first place?

• 19:07Speaker 04

  Do you have a co-founder? You know, what are some of the heartbreaks in that journey? Ask these questions to learn more about people. People genuinely feel connected to you because you're, you're actually asking some good questions.

• 19:18Speaker 05

  Lovely you're bringing up Grant. He wasn't in our prep, but he's such a guy.

• 19:21Speaker 04

  He comes to mind.

• 19:22Speaker 05

  But it's true. It's, it's a really, Grant's a real person and we love him for it. Before we get to the next question, though, speaking of friends, what about raising money from friends and family? Because that's something that's also talked about in this space of raising capital.

• 19:38Speaker 04

  Raising money from friends and family is a viable option. A lot of people, they think about friends and family and they think, oh, I don't know anybody who has money. Okay, you may not know people that have money, but there are people that know people have money. And people with money need to do something with their money. All right, they can't just have sitting in the bank. They're actually looking for opportunities to invest and ways that they can get a very good return on investment, an outsized return than what they would normally get with some more typical investment like real estate or the stock market. So it's worth you just thinking about, who do you know? Go into your phone, all right, my phone's not on me, but go into your phone and go to your contact list and scroll through and see who do you know or is in your contact list that might have some money they want to invest.

• 20:22Speaker 04

  They don't need to have the whole amount. They could, you know, say for somebody trying to raise a hundred thousand dollars, they might have ten thousand dollars. They'll get a portion of the raise of that round. So who do I know? It could be an uncle, it could be an aunt, it could be a neighbor, it could be a ex coworker. But you do need to understand that this is going to be a business transaction. And you gotta be cool with the fact that you're gonna be taking money from a friend or a family. And you should be confident enough that you're like, your business is going to get a return on investment. If you feel like, oh, I don't want to have to see them at Thanksgiving and have to explain how the business is doing. If you have those thoughts, you're not ready to raise, right? Especially from friends and family. Even if it's from a stranger, like an angel investor that, you know, you stumble upon, you shouldn't want to raise money if you are embarrassed to see them later on, right?

• 21:06Speaker 04

  You should feel confident enough, like, hey, I can't wait to see them next so I can show them all the great results we're having, all the traction we're having.

• 21:12Speaker 05

  It almost like it's easier to approach friends and family, but at the same time, you don't want it to go awkward and the relationship to go south as a result. So it's a big consideration, isn't it, when you are considering friends and family?

• 21:24Speaker 04

  Yeah, I think you should need to think about that. This is like any kind of relationship, things do get a little bit more complicated with money involved. So can you maintain that relationship with them and make sure that, you know, they understand this is a business transaction? That they've invested into other companies before so that they have experience in it. That it's not like their first rodeo or all their savings is dumped into this investment. And they're like, everything is riding on your business. No, you don't want to be in that position. I always say that when you're raising money or anybody's investing in your business, or even if you're investing in your own business with your savings, only ask them to invest what they're willing to lose. Okay, because that is a reality. The business might not succeed and it might fail. And you want to make sure that they're not completely in shambles.

• 22:08Speaker 05

  Yeah.

• 22:09Speaker 04

  Because there's a good chance you're going to run another business. And you, and they may feel like, hey, I think, I believe in this person. I think this next business idea will do better. I'm willing to reinvest despite the fact that I lost my money last time.

• 22:21Speaker 05

  Love it. Great advice.

• 22:23Speaker 04

  Before we move on, quick one. Nicole and I do this every single week. We answer a question from one of you, one of our listeners, one of our viewers, one of our community members. If you want to submit a question so that we can answer it right here on Q and A Wednesday, just go ahead to 100mba.net/queue. You can submit it there and we would love to grab it and answer it right here on the show.

• 22:44Speaker 04

  So one thing I want to add is there is an alternative to raising money. Now, you can raise money from your customers. We did this with Open or Ninja where we pre-sold our product, where we promised access to the software when it was ready to be released in four months. We opened up to beta access for 250 members and people paid money as a deposit so they can get access first to the software. So this is like crowdsourcing, right? And we were able to take that money and use it to make some hires and build out the software that we intended to build. And therefore was ready for our customers within four months. So pre-selling is a way for you to get funding. And what's great about this is that customers, they don't take any equity, right?

• 23:28Speaker 04

  They don't take a percentage of your company, they just get the product. And what I love about this as well is that you get instant validation. You realize, oh, are people willing to spend money on a product, even if it's just a portion of the price of the product, on the promise of you solving that problem or helping them in some way. And you could do this with any kind of product. This could be even just- Just like for an event, like I'm gonna throw a three day workshop and if you want to secure your spot, put down, you know, half the price and then you pay the other half, you know, two weeks before the event. The idea here is that you're crowdsourcing from the audience, the funding you need so that you can fund the project.

• 24:05Speaker 05

  We got so much interest in that first round that we opened up a second round. It was a great way to validate, this is definitely something that people would pay for. And yeah, and then you get that early investment as well. And people felt like they were a part of something early, which was the benefit that the customers got. They felt like they were those founding, early adopters.

• 24:24Speaker 04

  Yeah, and there's a lot of companies that actually start this way. Kickstarter is a website that does this, like organizes this for you so you can Kickstarter a new business. Most of those businesses are like physical products, but there's a company called Ghost, which we know John O'Nolan, who's the founder, who's on the podcast. John started his business on Kickstarter and he was a former designer at WordPress and he wanted to start a better version of WordPress and he called it Ghost. He Kickstartered it, got the initial funding, built the software and then sold it to the people later on beyond the Kickstarter campaign.

• 24:58Speaker 05

  Awesome. All right, we've talked, you know, we've gone in a few different directions and have given Justin, you know, some key bits of information so far, but let's just make it a little bit more concrete and go step by step. Cause I know you love to give the step by step.

• 25:11Speaker 04

  Yeah, so this is what I would do if I was asking this question, if I was looking to raise funds. The first thing I would do is I would calculate exactly what's the minimal viable version of my business? How much money do I need really? Okay, what's the bottom line? What is the, I'm gonna drive to this place holiday version, okay? For us in Sydney, it's like, hey, we could fly to Byron Bay or we could drive to Byron Bay. It's gonna take nine hours, but we could go up the coast and we could drive the car. And the version of Byron Bay that's like the minimal viable version is camping. We would camp, pitch some tents or, you know, even a low cost hotel, whatever it might be. The point here is that what's the minimal viable version of your business to get traction, to make some money from the business itself, so that you can go ahead and start growing from there?

• 25:57Speaker 04

  Most of us are not sending. Rockets into space. We don't need millions and millions of dollars. We need enough just to get started. The second thing I would consider is maybe shrink the plan or really focus and niche down your business. So that you maybe you can start with savings. How much savings do you need? Like, I think that most businesses, especially online businesses could start for less than $5,000. So if you could save $5,000, you don't need investors. You can get $5,000 through just some savings. Maybe this can take you six months or so. Once you have that savings, you can go and start, get some traction, get some sales, get some money, have a track record. Maybe at that point you can start asking for investors. Once you say, hey, I already have 100 sales for this product. And I already have a lot of demand and there's a bunch of people on the waiting list. Would you like to invest?

• 26:39Speaker 04

  That's a better position to be in. And that leads me into step three, which is to get sales. You need to get sales before you actually ask for any money. You need to show some track record, proof that people actually want what you have. No one's going to invest in just your belief in the product. One of the things that you learn in entrepreneurship after years, I've been doing this for 20 years, is that you don't really know anything. Okay? I don't know anything. Nicole doesn't know anything. Nobody knows anything. What really matters is what the market thinks. If you ask me, isn't this a business idea? Good? I have no idea because I don't know if the market likes it or not. I don't know that niche. I don't know that specific problem or pain or that the persona that you're going after.

• 27:19Speaker 04

  So you have to put it on the marketplace to prove to the other person that you're trying to get money from that, hey, the market says, yes, this is a good idea. So get some traction, get some sales, get some wins under your belt. Number four, start evaluating and mapping your network. Go into your contact list like I mentioned in your phone. Start looking at everybody there. Don't take anybody for granted. It could be a family member. It could be somebody that used to be, I don't know, your landlord. Anybody's number that you got in your phone is probably somebody that may or may not know somebody or be interested in what you have to offer. Even if it's not money, maybe they're interested in just sharing your product or service with other people or would be a customer one day.

• 28:00Speaker 04

  So just audit your network, your current network, meaning the people that you know. When I say network, just like anybody you know that's in your phone. Number five, start getting. Getting into rooms, put it on your calendar like I mentioned, go to an event. By the way, these events are fun. Like you get to meet people. There's interesting games sometimes. There's a chance to like get some nibbles and some drinks.

• 28:18Speaker 05

  I was gonna say, there's free food and drinks a lot of the time, so.

• 28:21Speaker 04

  Yeah, good way to kind of like have like Friday night, you know, hang out with some new friends. So get into these rooms, go to meetup.com, go to eventbrite.com. You could just literally Google whatever your niche is, like healthcare is your niche. Healthcare meetups in my city, whatever your city name is, and you could find tons of events constantly happening. So one of the easiest kind of entry points is going to a coworking space and seeing what events is going on during the weekend or on Thursday nights, Friday nights, the WeWork around you, whatever startup hub that's around you. Start going to these events and just see it as an exercise of just meeting people, talking about what you do. It's a chance to start networking.

• 29:02Speaker 04

  And number six, just get started. Start getting some traction. Start your business. Start building things out. Even if it's just building out your website and having a waiting list to just gain or gauge some interest from the audience, from the world. Start building content around it. Start, you know, you can start a podcast, start doing YouTube, start doing social media around your product or service. Start an Instagram account and start doing some reels or some posts about the product or service you're about to launch, or the problems that you solve, or the people that you serve. Get started. Don't just sit around and say, hey, I just need, you know, $5 million and then I can get started. No, you're not gonna know what to do with that $5 million if you know nothing about your audience or know nothing about your product or service or the problems you're trying to solve.

• 29:45Speaker 04

  So get started, get traction, start building this business.

• 29:49Speaker 05

  Yeah, I was gonna say that, because what, it's almost like this, the money's gonna solve all my problems, right? But then I run into the, I'm scared to ask for investment, or maybe there's this, you know, discomfort in asking for investment. But what really stood out there, especially with point number three with traction, is that that confidence comes through the doing or doing, doing all the things in business starts to build up your level of confidence that'll eventually come to, you know, come into the confidence. Asking for for funds. And I think the thing that is most critical maybe here is that it's so much easier to ask for investment when you're in a position of strength, when you've proven something already, rather than, I'm not gonna say begging for money. That's not the

• 30:33Speaker 04

  No, you're absolutely right.

• 30:34Speaker 05

  You're not begging for money, but

• 30:36Speaker 04

  Leverage is everything. A good example of this is that if you went to the bank and said, hey, I need fifty thousand dollars to make payroll, a thousand percent, you're not gonna get that loan. Okay. But if you said, hey, you know, give me fifty thousand dollars. We want to scale the business. Our business is doing X, Y, Z. We're doing very well, but we want to take it to the next level. Actually, I don't really want the money. They're gonna throw the money at you. Right. They're like, when you don't need it is when you have the leverage, obviously, because they see this as a chance to make money. Right. So you gotta put yourself in the position of the other party. Is this a chance for them to make money? Are you actually doing them a favor by sharing this opportunity with them?

• 31:12Speaker 05

  Yeah. And I think with, when I'm speaking to Justin directly, and, you know, having experienced this with you in those, in those 10 years of Webinar Ninja, that position when finally, you know, when investors did come to us, even when, when, you know, people were wanting to, were interested in buying the, the company, it was, it's just so much easier to have those conversations because we, you know, there was already proof, a ton of proof that this was working.

• 31:39Speaker 04

  Yeah. And there would be a lot more flexible with terms, like, especially if you don't want to do this transaction, like, we didn't want to do it. We're like, we're happy, we're growing, we're fine. And they're like, oh, well, we know, we can figure things out. Maybe you, we can do some of it as a loan and some of it as an investment. You know, they just want their foot in the door. They want to be part of something that's growing. You have to understand that you, when you have a business that works, that makes sales, that is growing month after month, year after year, that's rare. A lot of people that don't have businesses like that want to invest in businesses like that. They're like, oh, man, this is an opportunity. I don't see this a lot. So when you actually have that traction, you have a lot of leverage. So just to recap, Justin, know exactly what you're gonna do with the money once you raise it. Number two, how are you gonna

• 32:22Speaker 04

  get a return on investment of that money? Number three, get some traction, get some sales, get some validation of This product of this business so that you could prove to the investor that this is worth investing in. Number four, start with your network. Make sure that you are exhausting everybody that you know in your phone. And number five, start getting into rooms, start networking, start going to these events, start being part of the scene, right? And start being somebody that people remember, "Oh, I remember from last week. That was great. See you. How's everything going? What's going on with your business?" You want to be somebody that is part of the community. And like I mentioned, there is the option of pre-sale, right? To be able to raise funds from your customers, and there's also the option of using your own savings, going really minimal viable and starting just to get some traction.

• 33:04Speaker 05

  Amazing. Justin, I hope you have what you need. Go chase that traction. And thank you again for submitting your question. And if you've got a question that you want to submit and have Omar answer it here on Q and A Wednesdays, just go to 100mba.net/queue and submit your question.

• 33:21Speaker 04

  And if you want to continue learning, we recently published an episode that I think you'd love. It's called "The Gurus Relying." A lot of these gurus are talking about taking on debt, and that's the new trend. Debt is the devil, and that's what the episode's about, and how you could start your business without debt. So go ahead and check that out if you want to continue learning. Thanks so much for being with us today here on Q and A Wednesday. We are so happy to deliver answers to your questions. If you want to continue to get these episodes, make sure you hit subscribe so you don't miss an episode on whatever platform you're listening to. We're rooting for you. Check it next time.

• 33:53Speaker 05

  Thanks, guys.

• 33:56Speaker 04

  If you found today's episode helpful and you want more practical business lessons to help you start, grow, and scale your business, the best thing you could do is subscribe to this podcast. Hit subscribe or follow on your favorite podcast app, the one that you're using right now, whether it's Apple or Spotify or wherever you listen to podcasts. By hitting subscribe, you get our next episode automatically, and it's the best way to support the show. It's absolutely free, and it's a way for you to commit to growing your business. And now that you've subscribed, I'll check you in the next episode.

• 34:31Speaker 06

  Hey Fidelity, how can I remember to invest every month?

• 34:36Speaker 07

  With the Fidelity app, you can choose a schedule and set up recurring investments in stocks and ETFs.

• 34:43Speaker 06

  Oh, that sounds easier than I thought.

• 34:45Speaker 07

  You got this.

• 34:46Speaker 06

  Yeah, I do. Now, where did I put my keys?

• 34:50Speaker 07

  You will find them where you left them.

• 34:54Speaker 07

  Investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC, member NYSE, SIPC.