I have heard radio interviews and seen very successful social crowdraising campaigns, that raise their money and go onto become multi-million dollar companies, spoke with an entrepreneur who had 15 million to start for his business. While others struggle for years, or churning out idea after idea, or sit with $0 on gofundme or indiegogo. Is it luck? Talent, is it chance, a phase of astrology, is it the people you know, your credit score or earnings, the family you were born into, energy blocks. Is it neural pathways, is it if you nap like Einstein did? What is it?? I have pondered this for years. It is very hard to raise seed money. Yet some people know how to do it so well!
This is a very broad question on: 'what makes someone a successful entrepreneur?' and 'how to raise seed funding?'
Entire books have been written on how this is done, so any attempt to give you a professional answer in just a few lines would be unprofessional. Nevertheless, I will say that there are numerous factors that affect an entrepreneurs ability to raise early stage funding, among them are (in order of importance):
1. The team (how long they've been together, their skills, their past experience, their passion)/
2. existing customers / practical market research: how many existing users/clients are there. If your product/service doesn't exist yet, then how many people showed that they would buy the product/pay for the service (you can check this without actually having the product/service). this information is very important to investors (just throwing out potential numbers doesn't cut it).
3. The idea - yes, the idea only comes 3rd, as in most cases you will pivot (change the idea) at least once or twice before reaching the final version of the product/service.
4. Your connections / the amount of investors you approach.
5. Timing / luck.
If you give me more specific information (such as the type of product/service, the market, the team etc..basically your 'deck'), I will be happy to try advise you on the best way to raise money. For example, for a product, you should try avoid crowdfunding platforms unless you already have the entire manufacturing process and selling/shipping process ready. If not, you will be seeing 'fake'/copied versions of your product even before you hit the market.
Great point to ponder, especially as you're eying raising money.
Assaf offers some excellent advice which I would complement with:
* being realistic about the amount you're raising, the venue for the fundraising and your company's niche in the marketplace is essential for keeping perspective
* raising money is a full-time job -- if you do not commit the time, your efforts will falter
* a concise, well-constructed pitch helps get to a quicker "no," which can be just as valuable as a drawn-out "maybe."
If you wish to discuss, send me a PM through Clarity for 15 free minutes.
Your question really cracked me up...very funny!
Just to add on the presented responses to your question, this is what I have noticed:
* Most people fail to raise money because they fail to pass the Test of TRUST. Financial investments go hand in hand with trust which is earned in various ways.
During a fundraising presentation, prospective investors or funders ask some very common questions such as:
-Can we trust this company to get us a return on our investment?
-Does this company hold any tangible proof in the form of a VISIBLE product or past sales or purchasing orders, or past customers reviews?
-Does this entrepreneur show concrete work ethics worthy of our trust? (this is a very important question because most investors will not invest in someone who is lazy or with someone who only works 4 hour a week in his/her company)
Once an entrepreneur fails the test of TRUST, he/she can kiss goodbye any prospect of investment.
*Like you said in your question: 'some people churn idea after idea....'
Well, one of the golden rules of investment goes like: 'do not buy into an idea but buy into a tangible product'.
Ideas are unstable but an idea translated in a tangible product shows work ethic, stability in vision (something that investors want) and it commands a certain level of trust.
* And finally, many wannabe entrepreneurs don't raise funds because they lazy! That's plain and simple. One good way to measure laziness in fundraising is to compare the schedule of the successful fundraisers with the schedule of the failing ones.
You will notice that successful fundraisers move into 20 meetings a week to raise funds while the lazy ones may only use a one page social media on the internet.Such lazy entrepreneur should not expect a dime.
Generally the answer is lack of action.
I remember having a talk with a person at an Internet Marketing Party in Austin (everyone should travel to Austin + attend a few of these) about her project.
She had determined she required $80K to launch.
She had wasted... er, invested... 2x+ years asking investors for money.
Over a 15 minute period, I mapped out how I'd use https://Meetup.com for $100/year to bootstrap a business like hers.
She was making 5x figures a month in a few months.
This was her first business + she had no previous experience.
Moral: Action trumps all else.
Tip: If you can't figure out how to turn an idea into 5x figures a month in a few months... Either hire someone to help you design your monetization or come up with another idea.
I'm gonna go on a completely different tangent here and start talking about the energetics of money and how it works.
Most people don't get the money they want because they're not energetically available for it.
It's the same as a woman always meeting guys who treat her like crap and another woman having the same guys treat her like a goddess.
One woman is available to that and the other isn't.
When you're available to the money you want coming into your experience, you don't settle for anything less and you do whatever it takes to create it.
There's no negotiating that and you become the person who creates it. It's simple, but not easy and that's why many fail.
Because they're not willing to do what it takes AND be who it takes to create that income.
The truth is, once you have a desire for a certain amount of cash, it's already happened in another dimension. All you need to do is bridge the gap by hopping timelines and being the person who has that.
Also, letting go of whatever doesn't align with the person who'd have that.
For example, if you wanna make $10,000 a month by next week. Think about what the $10,000 you would/wouldn't be available for.
Step onto him or her and create from that space. That's how serendipitous meetings happen, and you meet the exact person who hands you the money because of something you said.
It's not super logical. But logic doesn't create miracles and you definitely can't bend time with logic 😉
But you can with intuition and your intuition already knows how you get the money because it has access to the version of you on that other timeline who already has it.
Hope that helps. If you have any questions about this, you know where to find me 😘
Love the question! I also believe Maurice, Kerby and Assaf have done a great job answering it.
What I'd like to add is the consideration for these questions:
* Why are you raising the money? (why will it help? why can't you do it from profits? why now?)
* What do you need it for? (what are you buying, people's time? equipment? land? compute power?)
* When do you need it? (when is too late? when can you get started?)
* How are you going to manage it? (how will it be spent, tracked, reconciled, invested, returned, etc.)
* Where is the need? (where is the market for whatever you are building?)
If you answer vaguely to any of these, it might be a factor.
I think it wildly depends on a combination of
- the entrepreneur(s) way with words and people
- the idea's general "sexiness" & timing
- the country/ecosystem/networks entrepreneur + idea are in
- the idea's special connection/appeal to eventual money-givers
& General rule: People attract people & Money attracts money-
You see one restaurant full of people vs. the other restaurant which is empty- where do you choose to eat?
There is a person with USD 90'000.- who needs another USD 10'000.- to execute a customer delivery vs. there is a guy with an idea who needs USD 10'000.- to build a customer base- who do you support?
Sounds obvious, but core human functioning & reasoning like that explain the seeming "easiness" of how some people get money. Once they're in the right loop, have the right credentials out: support just calls more support (you may read about the "Pareto distribution" principle). Sure, that is unfair, but you can try to use it to your advantage also if you do not have much.
If you start a crowdfunding campaign you need at least all of your friends + family members to support your project publicly (on the platform, but also elsewhere), then once you have some initial dynamics, it makes sense to advertise the campaign on several, relevant* channels to strangers. The ones of them who get interested click on your campaign and can already see something going on there. Not just a blank space, stuff like "USD 0 of USD 10'000 funded"- huge turn off.
*you want to have your dog food project funded, then you need to communicate about the campaign where dog owners read/listen/learn. Just "Facebook" is too general.
This question has generated such interesting discussion (I love it when Clarity members answer by consciously building on each other's replies). I've been watching founders launch and raise and fail to raise and fail and launch again for over three decades in every ecosystem from publishing to VC. I'm going to share this from my experience: What if those stories of raising and launching that look successful from the outside or seemed to be easy were actually just very well orchestrated announcements of what was years of hard work and much failure? Because that is very often the case: Those of us who are not in the sausage factory while the sausage is being made only get to see that yummy, perfect-looking piece of sausage served up on a platter of gold with all the right fixins. But what preceded that perfect moment was all manner of behind-the-scenes chaos and blood and guts and gore and loud machinery and overworked factory employees and don't forget the part about when the lease was suddenly up and the sausage had to be made out of garbage cans in the founder's ex-girlfriend's basement and so on. That's an extended sausage metaphor but you get it: it wasn't actually easy. So then the question for you, dear asker, becomes, What if YOU stop believing that raising is remarkably easy for some and crazy hard for others?
This a topic I love to talk about. In general, I believe, everybody has her/his own history, knowledge, experience, talents, etc. I personally have many things done unsuccessfully and many others - successfully. When analyzing afterward, it seems that when unsuccessful, this was not my strength. Possibly I was influenced and wrongly excited by something or somebody, that is not for me. Many people love to read how Apple went up, or Microsoft, or Napoleon. But I am an individual, only one of the sort in the world. Others look like me, talk like me, but just partly.
In short, everybody must discover, what is her/his strength and talents and to put much effort to develop. As it is said - success is 1 % talent and 99 % of work. But all 2 parts must be presented.
They don't. That is a perception that is cultivated like an instagram image. You are only seeing the success. You are not seeing the countless hours of preparation, courting of fundings, and building a company worthy of funding. Not to mention the ridiculous amount of due diligence on the part of the funder to ensure that they are putting funding into something that is "fundable".