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Element 35. Visible Capital > Practical Experience—This Deserves the Minimum We...

Practical Experience—This Deserves the Minimum Weight of 1

Sometimes the capital is quite visible early in the life of the idea. An impressive idea backed by a strong management team is usually quick to be funded. You should expect to know the identity of the most promising source moments after your epiphany. The trick is to find a champion inside the funding source who will be smitten with your idea. Look for someone who has managed the funding of an enterprise in the industrial sector in which you expect to be active. I call this “smart money.”Then, when the time is right you simply submit your business plan, keep your appointments to meet with him or her and push the process. And finally, a sobering thought: You will devote far more time to raising capital than you ever thought possible or necessary.

Dr. Market’s Observation:

Beware the rats. There are financial predators out there who may attempt to convince you that they can find your millions of dollars in seed or first-round financing. They will sound and look great. Their price will be control of your company or the CEO’s chair or some other highly elevated position. One thing will lead to another and they will take over your company. Then they might pocket all the available cash and squander the assets, often on preposterous contracts with their family or friends. How do you spot them up front? You protect yourself by examining their relationships and ties to responsible bankers and other resources. Only deal with people who are properly introduced to both you and the right investors. Also, do your own due diligence on the people who will try to help you find your first money. Never let an incongruity go unsolved.



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