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Capital Raising Timing and Tactics with Brett Sharenow

💡 Who is Brett Sharenow?

Brett is a trusted advisor in the world of strategy and raising capital from Venture Capitalists, Angels, and Private Equity Investors, making him a true fundraising specialist. He focuses on strategy and capital raising for startups and high-growth companies. With three decades of experience under his belt, he has raised upwards of $800 million for his clients.

💡 Brett is helping to kick off the second season of the Scale By Numbers podcast. Because the focus of this new season is fundraising, we had to bring on an expert who knows the ins and outs of raising money. This is only part one of Brett’s interview, so stay tuned for part two coming soon.

 In this first part, we discuss:

•   The ideal time to start raising money
•   Strategy gaps to be aware of when it comes to fundraising and scaling a business
•   Key questions to ask and necessary criteria to meet before seeking money from investors
•   Whether or not you should raise debt in order to maintain more equity
•   Why advisors are critical in the early stages of raising capital for your business

💡 Highlights From This Episode

When do people typically reach out to someone like Brett to begin raising money? Unfortunately, many people wait until it’s too late. A lot of business owners have fallen victim to believing a myth that it takes only 90 days to raise capital. Brett says the ideal time to reach out is about 12 months before you need the money. This provides enough time to go through the entire raise process, which involves coming up with what Brett calls the 3C’s℠: your compelling case for customers℠, financial model, raise strategy, and pitch deck.

When raising capital for your business, there are a few important questions to ask yourself. How will I raise money? How much money do I actually need, both now and in future rounds? What’s the potential ROI of that money? Will the business return the amount the investor needs so they’ll put money in? And will it return that money in the timeframe the investor needs? Answering these questions will help you determine if you should bootstrap or raise venture, angel, or private equity money, or if you should seek another option.

How do you find the right investor for your business? You need to look for the lead. The lead is the investor that’s typically putting in the largest amount of the round, but most importantly, is also setting the terms for the round. They’re going to issue a term sheet, which states how much of the ownership percentage the investors will get from the business owner for the money given along with many other conditions for the raise.