As a new entrepreneur you will have to dig deep within your pockets to kick start your idea or spend time pitching and convincing your family and friends to invest in your business so you can raise capital.
Most entrepreneurs think this step is a hassle and is time consuming so they eventually give up on there business and dreams.
Taking a ‘No’ from a venture capitalist, family member or even a bank can be extremely disheartening and make you question your abilities. However, don’t let this set back get the best of you.
In this article I will provide you with 6 ways to overcome funding rejection and how to use it to your advantage in the future.
You should always act professional and never lose your cool when you are out networking to raise funds. You will always face 100 rejections before you get 1.
Even if an investor says ‘no’ to you you can always follow up with them to see if they would reconsider. However, hounding them constantly will put you in there black list and they will never reconsider you.
Another good option to consider is to do some more research on your business idea, model and startup pitch, adjust it accordingly to what the investor is looking for and hopefully it will give you a better chance of raising funds.
95% of entrepreneurs fail to secure investors because of there startup pitch. They keep rambling on and on about what there product does but never about what there product can do.
Raising Funds is a Long Term Goal
Most startups fail to raise funds overnight unless they are incredibly lucky or they have a brilliant idea that can change the world.
Fundraising and meeting with potential venture capitalists is a long term project as meetings can last quite a few weeks before they make a decision.
Even if you do close a deal with an investor it can take a few months before the deal is closed and the paper work is signed and the capital is ready to be transferred to your account for use.
You should focus on the long term objectives and not the short term. Rejections at the beginning can be a blessing if you learn from them.
All Startups Get a ‘NO’
Great business ideas aren’t hits immediately. They have gone through numerous difficult times, obstacles, failures and countless number of rejections before they became the greatest business idea ever.
If you speak to multiple entrepreneurs they will also tell you that the key to succeeding is to constantly fail till you learn, learn and learn from your mistakes. Only then you will be able to get right back up stronger, ambitious and succeed.
As the serial entrepreneur and CEO of Wheels Up, Kenny Dichter says in his interview with Entrepreneur, “No, basically means NOT YET.
Figure Out Your Options
In order to raise funds for your business there is no right or wrong way. If you are facing issues and obstacles in getting these funds and you are not progressing then you should change your strategy.
Most entrepreneurs only like to raise funds from angel investors and private lending companies, but there are several other options you can consider as well.
For example; you can apply for loans and grants from local government programs and small business banks that have favorable terms.
Other great ways to raise funds is by online platforms like kickstarter, gofundme, indiegogo and other web platforms that can increase your chances to get investments.
Review Your Business Model
Rejection is always a learning opportunity depending on how you take it. You should review your business model and get a consultant to go over it with you to see what issues you have in it, draw backs, weaknesses that can help you fix them and improve upon the business concept.
Fixing gaps in the model and doing intensive market research and figuring out the projections can draw the gap between a great idea and a good one. Once you have completed and improved your idea the potential investor would be interested in having a second look.
Improve Your Pitch
Your business pitch is by far the most important thing an investor looks at. It is basically a consolidated version of your business plan and it should be strong enough to capture the attention of your potential investor.
You are basically given a minute or two to pitch your idea in a few sentences – you should be able to explain your entire business idea and exactly why it is valuable to the investor in this pitch.
If you can accomplish that then you will be rewarded.
I have been working with several startups over the past few years and have noticed gaining investors has been the hardest obstacle for them.
For this reason I have compiled a database of 100 venture capitalists contact details full names, email address, contact numbers and company names.
This database will allow you to get in touch with top investors who would be interested in sitting with you to hear your business model out and if interested invest in you as well. You can get access to this database by clicking here.