When to raise money...

Until last year, any company I was part of, I never took investor money.

When I was 19 and building a business, that eventually led to me going a million dollars in the red, I almost took $4 million, however, my partner went AWOL and the investors weren’t ready to give a kid a $4 million dollar check.

Here’s the thing, most of the time, investors will ruin your business. Not because now you have a boss, it simply ruins it because money is energy and if you don’t know how to manage energy, it will disappear.

You see this with lottery winners, people who have inheritance, along with the number of failed invested companies.

If energetically you can’t handle the money, the money will go elsewhere, where it can be handled.

That’s a law of money, that I’ve found.

It’s also why, I invest so little of my actual money into companies and prefer to either advise them, or give them a credit line when investing, in which I can advise them on how to use.

Why?

Because, if I give someone a million dollars. They will spend exactly a million dollars, even if they only needed to spend $200,000 dollars.

When “should” you take investment money based on this?

Well, the obvious answer is “when you need it”, however, the more obvious answer is… When you truly know exactly what it’s going to be used for and it’s simply going to speed up a process that’s already happening.

So, instead of…

“Once I have raised money, we’ll figure out product market fit.”

It is…

“We’ve found product-market fit, we simply don’t have enough resources to get this moving fast enough to work”

The secondary, is always the answer, at least from my belief system.

In one of the companies, in which I’m an investor and advisor, earlier this year, we raised $725,000.

The software helps a massive need inside of the wisdom economy, helping those who are helping others a platform to do so.

Right now, most of the time, it’s about 9 pieces of software, or a terrible piece of software that doesn’t do a great job.

In both cases, it hurts the Entrepreneur and the client.

I first invested a few years ago, knowing that there is a need for this software. At first, it was purely a very small angel investment. Since that time, I’m not the 2nd largest shareholder.

We’ve accomplished a lot, building a brand new piece of software, acquiring lots of super happy customers and dialing in our marketing…

However, to be totally honest, we’re stuck.

See, in many businesses that are software based, it’s a chicken and egg scenario. Once you have something that “works”, the issue is… that you need the capital to actually share it with the people to get it to work.

Further, software eats money— for all 3 meals a day.

The CEO and I spoke a while back and we knew that raising more capital, in this case made sense.

Why?

We’ve got massive momentum, however, we need to get our monthly/annual recurring and we don’t want to take the focus outside of what’s working (aka. launching a high ticket program to infuse the business with capital — a good choice, at times).

Thus— in this case, it’s one of those rare times, where I said.

It’s time to get the investors…

But see, almost all other times… Investment will actually hurt you and further you away from what you really want.

If what you have isn’t working, more money isn’t going to solve the issue.

If what you have is working, more money, with the right guidance can solve the issue and help you scale the business.

So, if you’re ready to scale… ask yourself…

Do I really want to focus on trying to get investors? Or should I just go and figure out how to build the damn thing…

In this case, investors will bring the capital for massive 2023 growth, alongside, in my hopes of a few strategic partners to help us in the next level.

It’s always case-by-case… simply know, money flows successfully to those who build and expand the universe :)

- Scott

P.S. Due to regulations, I’m unable to publicly speak about this company, if you’re interested in knowing more, my inbox is always open.