What are some common misconceptions people have about raising capital?

Posted by Mohammed Chowdhury on

1. Thinking it is easy. It will typically take 3–6 months of full-time effort. 80% will fail.

2. That the “Idea” is worth something. It is not worth $0 because anyone can copy an idea and do better at marketing, sales, product development or just dump capital on that idea  

3. Thinking VCs are the best source, they are the worst for 90% of businesses. They finance at most 1 in 200 plans and represent a tiny percentage of business financing. A narrow niche of rapid growth, technology based companies mainly.

4. A company has value on day #1. It does not!  Value and pre-money valuation come from team + plan + market research + product development. Investors generally put money in only AFTER value is created.

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The pitch deck is critical. It separated out the 75% of people looking for money that did not do their homework. A good angel or VC can glean a lot about the team from this 5-minute read. An investor would be silly not to review it to save time. It is your calling card and foot in the door - but only when done well. Over 80% of pitches I have seen from many hundreds are missing the key data, sentences and strategies.  

As an angel, Serial Entrepreneur/CEO for 20+ years and consultant to VCs I have been on every side of the table in most types of deals from $100K seeds to $300M. Each level, set by the amount sought and stage of development of the company, has different required criteria to get a face to face or video call.


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Bob Norton is a long-time Serial Entrepreneur and CEO with four exits that returned over $1 billion to investors. He has trained, coached and advised over 1,000 CEOs since 2002. And is Founder of The CEO Boot Camp™ and Entrepreneurship University™. Mr. Norton works with companies to triple their chances of success in launching new companies and products. And helps established companies scale faster using the six AirTight Management™ systems. And helps companies successfully raise capital.

Call (619) SCALE06 or email info@AirTightMgt.com for a complementary strategic consultation.

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