DIY Fundraising; Why the cost of capital can be your sanity
How founders and CEOs can maintain their focus on building their business whilst simultaneously raising much needed capital from institutional investors.
By Paul De Raney
3 minute read
Shouldn’t it be called a shallow learning curve? You know the situation. There’s a body of knowledge where it would be useful for you to achieve a certain level of understanding or competence. Yet you just can’t get there quickly enough. Surely a steep learning curve means that your achievement occurs in a short space of time!
One of the most pertinent versions of the shallow curve is DIY.
I HATE DIY.
Why? You spend all your time learning the task, only to complete the task and then down tools. In 2012, I restored the beautiful pine floor in the living room of our Victorian house. I read, I asked friends’ advice, I subscribed to channels on YouTube to learn the theory. The execution was painful. Physically, mentally, emotionally. There was anger, tears, pain, regret and finally joy. And then my friend stepped on the still wet varnish.
I love that floor.
When will I be restoring a wooden floor again?
I spent all that effort gaining knowledge (on a shallow learning curve) that I will never use again.
I have a friend who runs a business which does this work to an unbelievably high standard. He deploys his experience and expertise to the delight of his customers each and every day. He cares even more about wood floors than I do. He loves his work.
We at Bean Partners hear stories like this every day, though there’s no mention of sandpaper, dust and varnish. We hear this when our clients talk to us about raising capital and potentially working with Institutional Investors.
We work with ambitious founders and CEOs whose businesses deserve every bit of attention their team can throw at them.
When the idea (that they have worked hard to turn into reality) starts becoming capital hungry the choices are difficult:
- Find that 25th hour in the day
- Ask the existing shareholders for more money
- Raise some institutional capital
Ideas abound. Exemplary execution does not. Institutional investors know this. They will expect founders’ commitment to execution of the mission to be evident (and evidenced). It’s a huge challenge. And then founders will (hopefully) have to deal with multiple offers and term sheets and time consuming meetings…
Risk budgets will change. Capital will be more discerning. The investors will want to be confident their capital will be efficiently and effectively deployed.
The number of meetings will increase. The curve might be shallow.
We, at Bean Partners, love what we do. Working with CEOs and founding teams to help them fulfil their ambitions is an alchemy of their energy, our experience and a continuing commitment to understanding who would be the most suitable investors for our clients. This sort of alignment positively changing the value of the shares in the company. Our work challenges every stage of development of the business to service a resonance of effort. We are happy to do the hard yards so you don’t have to.
We don’t believe in shallow learning curves.