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Insights and Opinions: 5 Mistakes Entrepreneurs Make While Raising Capital

Story by Eric M. Jackson

 

What are some of the more common mistakes entrepreneurs make when raising capital? Eric M. Jackson, the CEO and co-founder of Manhattan Beach-based CapLinked, shares his top five for our Insights and Opinions section.


Raising capital can be a challenging process, especially in an economic environment marked by so much uncertainty and risk. But entrepreneurs often make the process harder on themselves by committing several common mistakes. Regardless of your industry or the size of your raise, here are five pitfalls to make sure you avoid.

Not asking for introductions. An entrepreneurís connections are his greatest asset, and 4 out of 5 leads typically come from his extended network. Donít psyche yourself out by saying you donít know any investors. Instead, schedule coffee meetings with the mentors, influencers, and thought-leaders whom you know to tell them about your business and get their advice. Ask them who might be interested in investing in your company and request that they put you in touch with them. You canít get what you donít ask for, and not asking your network for help is a surefire way to go nowhere.

Not working with a lawyer. People starting companies like to do things on their own. And theyíre often reluctant to spend money on advisors ó particularly lawyers ó especially if theyíre still self-funding or bootstrapping their business. But the do-it-yourself attitude is dangerous (Continued...)


Read Eric's advice in 5 Mistakes Entrepreneurs Make While Raising Capital.