next question comes in from salvador he
has a clothing company it’s one years
old if he’s going for an investor how
much money do you think I should ask for
so that’s a pretty generic question but
how do you how do you address how much
money you should ask for any point in
time in your business yeah I think hey
so do you need to almost turn the
question around and say how much do I
need to fuel the growth so again you
don’t need to you never go to harbor and
they you you you know your business you
know your customers you could put a
projection around how you could grow
your business and then what you need to
take on extra employees or to service
them or sales or marketing and this
little functions you need to keep
customers delight customers and grow as
a sustainable business model and then
once you do that is kind of work
backwards about over the next year what
do I need to fund that growth look here
your cash balance look at all the
obvious things about when you’ve got
revolving credit a lot of businesses
probably at that stage is still using
the credit card to fund some of their
growth as well and then think you know
have a really rock solid plan over the
next year 18 months this is the best
case if I accelerate it to a sort of
stretch plan back to Evans point could I
go back and say have an option with an
investor to really kind of ramp it up
and grow faster so I think the key
question here is it’s not how much money
to own race is what is the business plan
to grow responsibly and sustainably but
as fast as you can to execute them the
opportunity and then work backwards to
look at the funding requires yeah i
agree i like looking at here here’s
where we want to go in the next year and
how do we fund that before we’re in
about how do we fund the next ten years
who’s got to actually execute your one
year plan first and if you do that right
it’ll be way easier to raise for what
you’re gonna be doing on going i would
add to that when you are talking to an
investor you need to have absolute
clarity over how much you need and what
it’s going to be invested into because
if there’s
any hesitation if there’s any doubt then
you’re gonna make the investor scared
they’re going to be spooked and they’re
going to not want to invest in you so
you have to have absolute clarity you
have to know exactly where you’re going
to be spending that money and the
sequins point you make your plan one
year here’s what we wanted what we want
to do is where we’re going to go and
then in your projections here’s what
will often happen an investor at least
in the VC world will look at the
executive summary of your business plan
then we’ll look at who is part of this
deal like the horse for the course they
call it right who is the jockey who’s
the team and then we look at the
financials do the financials make sense
you know here’s where you want to be and
you have to be able to explain every
single number in your financial
statement why it’s there and if you
can’t then it’s going to be really hard
to convince an investor to want to come
on board with you yeah t think evidence
you’ve got to know where you’re going to
invest it so no better on the management
team and the longer you’ve executed
successfully the more back in you’ll get
but you’ve got to know how you invest it
because I’ve seen companies even when
they get to like 15-20 people they go
and raise a load of money and all the
stuff the bear behavior kicks in like
they design a new logo and you brand and
stuff and start travelling first class
and all the kind of nonsense that i
would say waste money rather than
focused on the mission of driving body
for customers and grow your business
yeah and you know the other thing to
keep in mind there for those you
watching is raising money can become a
full-time job which means you are not
spending time executing on your business
yeah and so you can often a for that if
you’re a social entrepreneur and no
investor wants to put money into a
company that isn’t gaining traction
momentum and so if you can focus on
executing and getting some results over
the next 6-12 months that’ll give you a
lot of ammunition to go talk to
investors with
has a clothing company it’s one years
old if he’s going for an investor how
much money do you think I should ask for
so that’s a pretty generic question but
how do you how do you address how much
money you should ask for any point in
time in your business yeah I think hey
so do you need to almost turn the
question around and say how much do I
need to fuel the growth so again you
don’t need to you never go to harbor and
they you you you know your business you
know your customers you could put a
projection around how you could grow
your business and then what you need to
take on extra employees or to service
them or sales or marketing and this
little functions you need to keep
customers delight customers and grow as
a sustainable business model and then
once you do that is kind of work
backwards about over the next year what
do I need to fund that growth look here
your cash balance look at all the
obvious things about when you’ve got
revolving credit a lot of businesses
probably at that stage is still using
the credit card to fund some of their
growth as well and then think you know
have a really rock solid plan over the
next year 18 months this is the best
case if I accelerate it to a sort of
stretch plan back to Evans point could I
go back and say have an option with an
investor to really kind of ramp it up
and grow faster so I think the key
question here is it’s not how much money
to own race is what is the business plan
to grow responsibly and sustainably but
as fast as you can to execute them the
opportunity and then work backwards to
look at the funding requires yeah i
agree i like looking at here here’s
where we want to go in the next year and
how do we fund that before we’re in
about how do we fund the next ten years
who’s got to actually execute your one
year plan first and if you do that right
it’ll be way easier to raise for what
you’re gonna be doing on going i would
add to that when you are talking to an
investor you need to have absolute
clarity over how much you need and what
it’s going to be invested into because
if there’s
any hesitation if there’s any doubt then
you’re gonna make the investor scared
they’re going to be spooked and they’re
going to not want to invest in you so
you have to have absolute clarity you
have to know exactly where you’re going
to be spending that money and the
sequins point you make your plan one
year here’s what we wanted what we want
to do is where we’re going to go and
then in your projections here’s what
will often happen an investor at least
in the VC world will look at the
executive summary of your business plan
then we’ll look at who is part of this
deal like the horse for the course they
call it right who is the jockey who’s
the team and then we look at the
financials do the financials make sense
you know here’s where you want to be and
you have to be able to explain every
single number in your financial
statement why it’s there and if you
can’t then it’s going to be really hard
to convince an investor to want to come
on board with you yeah t think evidence
you’ve got to know where you’re going to
invest it so no better on the management
team and the longer you’ve executed
successfully the more back in you’ll get
but you’ve got to know how you invest it
because I’ve seen companies even when
they get to like 15-20 people they go
and raise a load of money and all the
stuff the bear behavior kicks in like
they design a new logo and you brand and
stuff and start travelling first class
and all the kind of nonsense that i
would say waste money rather than
focused on the mission of driving body
for customers and grow your business
yeah and you know the other thing to
keep in mind there for those you
watching is raising money can become a
full-time job which means you are not
spending time executing on your business
yeah and so you can often a for that if
you’re a social entrepreneur and no
investor wants to put money into a
company that isn’t gaining traction
momentum and so if you can focus on
executing and getting some results over
the next 6-12 months that’ll give you a
lot of ammunition to go talk to
investors with
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