Excerpted from Business Black Belt by Burke Franklin
Perhaps the single largest obstacle to raising capital for your business is the idea that investors will be forever breathing down your back… they'll own you… your entrepreneurial venture, your freedom as you know it… will be over forever. So, the debate rages within your mind whether or not you really want investors and isn't there a better way to have the money to build your business and still do things your way?
No doubt you've heard many horror stories about investors' meddling. You aren't alone in this dilemma. Many entrepreneurs don't want to give up control and don't want to take money from people who will now tell them what to do.
What hasn't been explained is how to choose the right kind of investors. Without this knowledge, many entrepreneurs take money and endure the consequences. Howard Schultz, the CEO of Starbucks discovered the secret after many agonizing presentations to investors. He explains it beautifully when he says that the right investor (and for that matter any employee, board member of the management team member) at Starbucks "must have a passion for coffee and the coffee experience." Can you imagine a tea-totaling investor who invested in Starbucks as a pure financial play? The phone calls… "What can't you buy cheaper beans?" "Why do we spend so much money on our stores?" Blah blah blah… On the other hand, if the investor loves coffee him/herself, they will inherently understand (or come to understand) the reasoning behind all of Starbucks moves. In fact, their phone calls and unsolicited suggestions would be in tune with the founder and taken as the real contributions that they are.
How can you find investors who have passion for your business and what you and your products and services are about? This is one of the keys to taking on investors who will support you with much needed growth capital, as well as (and often more importantly) all kinds of other support.
About the author:
Burke Franklin is the originator of the popular BizPlanBuilder business plan software and CEO of JIAN, the company behind many successful business management software tools. (www.jian.com) JIAN has sold more than 1,000,000 copies of its software worldwide since 1988.
Overall, Burke's management & marketing experience spans 28 years. With an extensive background in sales, marketing and management, Burke brings a very practical approach to everything he does. In 1995 Burke was elected to White House Conference on Small Business and in 1996 he was nominated for Ernst & Young’s “Entrepreneur of the Year.” Also, Burke is an instrument-rated pilot, and is a second-degree black belt in TaeKwonDo. Burke’s highly praised book, Business Black Belt draws parallels from the martial arts and, while sometimes politically incorrect, it is rich in hard-won advice for building and running a business today.
