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Q

Hey Susan, I’m having a hard time raising money for my business. I’ve tapped out some relatives and friends and am not even close to having enough to open my first bar. (I’ve got a great concept that can become a chain). How do you know when you should quit? This is taking a lot of time.


“I can’t raise money for my business!” This is the most common remark I get in emails and in workshops. It’s not just the sentiment of startup entrepreneurs like you but also owners of stable, revenue-generating businesses who need funds to get their companies to the “next level.”

By the time they reach out to me for help, they’re exasperated, intimidated, angry or demoralized. Add in some colorful language and you have a clear picture of the frustration associated with fundraising. One business owners said to me, “I just don’t understand why this is so hard.”

Here are two reasons why “it’s hard” to ask lenders and investors for business funding.

The first reason is, quite simply, business owners and startup entrepreneurs quit! They stop trying. It doesn’t make sense but it’s true. Entrepreneurs who happily log 80 hour work weeks perfecting their first products, websites and patent filings abandon their fundraising efforts at the first sign of adversity.

Here’s how it happens: An entrepreneur sends off a few emails to several different investors and gets discouraged when his phone calls are not returned the same day or even within the same week. Another business owner reads online how difficult it is to get bank loans. And then after a bank turns down her first and only loan request, she assumes that it must be true – it’s impossible to raise money for a business.

I am guessing you have just asked people you know for money. You’ve received some checks but also some turn downs too. Now what? To raise capital for a business, you will be rewarded by casting a very wide net. Big concepts that require big money, need entrepreneurs who are willing to do whatever it takes to achieve your goal. You can do this.

Notice the word “willing.” You have to decide to fundraise until you get the job done. Right now you are considering quitting at mile two of a 100 mile journey. If starting a bar and future chain is your dream, don’t quit on your dream so soon!

Just ask Howard Schultz, the Chairman and CEO of Starbucks. In his book Pour Your Heart into It, Schultz describes how difficult it was during Starbuck’s early days to identify investors for his coffee store concept. Schultz says that he was turned down by 217 angel investors (some more graciously than others), but received checks from 25 investors.

What’s important here is not his roughly 10% “yes-to-no” ratio; but his persistence. He kept calling, kept talking, kept networking until the fundraising job was done. I also admire Schulz that he didn’t let disparaging turn downs derail his determination and passion. He adapted, improved and eventually persevered. You can too.

Another reason why entrepreneurs say it is so “hard” to raise funds is the process is new to them. Anything worth doing, usually involves some serious focus and practice. Don’t expect perfection day one.

Beginners also benefit from getting some instruction from other people who know how to raise funds for a restaurant, bar or other type of hospitality business. Start asking for introductions. Build your ecosystem. Be bold. Don’t quit on your dream.


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