He adds: "At a minimum, you certainly should be aware of the many pitfalls of raising money from venture firms. Raising outside capital dilutes your ownership interest, hurts your ability to run your own business, and diminishes your freedom--a key reason why many entrepreneurs start out in the first place."
I agree that television shows like "Shark Tank gives you the impression that pitching your idea to investors and raising money are significant parts of being an entrepreneur. The curricula at many of America's premier business schools reinforce that--and it's not true."
Mr. Hamilton asks: "So, if raising money like you see on Shark Tank isn't entrepreneurship, what is? It means starting and running your own company, not just completing a business plan or having a great pitch. Most businesses that are started are service businesses, many of which can be started with little money."
Whether it is for companies that I helped launch or those that I advise, I encourage the management team to focus on creating a path to revenue by building relationships with prospective customers versus the need to spend limited time cultivating relationships with investors. However, as Mr. Hamilton notes, "If you absolutely must raise money, do so deliberately. Be very cautious about the people from whom you raise it."
In an article published by Entrepreneur, sales strategist and author Marc Wayshak provides seven tips for getting more sales meetings with prospects:
1. Use an organized prospecting campaign.
"When it comes to prospecting and identifying cold leads, most salespeople are doing without any sort of plan in place. But when you just pick up the phone and randomly call prospects, you’re bound to hit a wall -- and fast. Here’s the problem: If prospects have no idea who you are, they aren’t going to want to talk to you.
"A sales prospecting campaign allows you to lay a foundation before you ever call a prospect. Map out an entire process with scheduled direct mailings, emails, event invitations and more. This targeted campaign prepares each prospect for your call, which will ultimately help you set more sales meetings than ever before."
2. Volunteer to speak.
"Public speaking makes many people uncomfortable, but if you're willing to face your fears, this is a great way to get in front of 70-200 ideal clients at the same time. When you speak, focus on sharing trends and challenges you’ve observed in the industry.
"By the time you're done, 70-200 new leads will suddenly view you as an expert with a lot of value to offer them. Just one speaking engagement can lead to tons of meetings with great prospects. That's certainly worth a temporary case of pre-speech sweaty palms!"
"A sales prospecting campaign allows you to lay a foundation before you ever call a prospect. Map out an entire process with scheduled direct mailings, emails, event invitations and more. This targeted campaign prepares each prospect for your call, which will ultimately help you set more sales meetings than ever before."
2. Volunteer to speak.
"Public speaking makes many people uncomfortable, but if you're willing to face your fears, this is a great way to get in front of 70-200 ideal clients at the same time. When you speak, focus on sharing trends and challenges you’ve observed in the industry.
"By the time you're done, 70-200 new leads will suddenly view you as an expert with a lot of value to offer them. Just one speaking engagement can lead to tons of meetings with great prospects. That's certainly worth a temporary case of pre-speech sweaty palms!"
3. Ask for introductions.
"Work smarter, not harder. Introductions are an opportunity to let someone else do the heavy lifting for you. Take 15 minutes a day to ask someone you know -- a prospect, customer, friend or family member -- to introduce you to someone in their network who may benefit from your product or service.
"This simple habit will lead to five new introductions a week and 250 new introductions each year. Can you imagine how those 250 introductions could quickly lead to a calendar full of quality sales meetings?"
4. Write articles.
"If you can't bring yourself to speak at a trade group meeting, try writing an article for a publication instead. As a salesperson, you have the unique opportunity to meet dozens or even hundreds of people across your industry. This gives you a bird's eye view of what's going on, and your perspective is extremely valuable.
"Share what you know in an article, and trade publications -- which are constantly looking for more content -- will be happy to publish it. This helps establish you as an authoritative source, and prospects who spot your article will be much more interested in meeting with you to learn more."
One of the purposes of this blog is to share my perspective and that of my colleagues on matters valuable to prospective clients and customers. It is also important publish each blog post as an article on LinkedIn and sharing them via other social media channels such as Facebook, Twitter, WeChat, etc.
5. Create and share special reports.
"Many salespeople find it challenging to get from an initial phone call to a face-to-face sales meeting. Most of the time, it's because they're failing to provide anything of value to their prospects.
"Your prospects are constantly wondering, 'What’s in it for me?' Demonstrate the value you bring to the table by putting together a short report of trends you’ve observed in the industry. Share it with prospects, and watch how much more willing they are to meet with you when they realize what kind of value you have to offer."
6. Host your own event.
"I've personally found this to be the most powerful strategy for growing my own business, so I host two private events every year. First, rent out a space in your city that feels exclusive and special. Next, prepare to offer something of value to attendees. You can share insights based on your unique perspective, and invite other speakers to do the same.
"Finally, invite your top clients and encourage them to bring others who may find value in what you'll share. Ask everyone in your network for introductions to people who may be interested. This is a great way to establish yourself as a helpful expert, meet new prospects, and fill your calendar with meetings."
Hosting an event has been a successful strategy to attract new clients for CareerLight, company that provides customized career training for international students to help them prepare for a successful career. The following posts provide an overview of those events: "Helping International Students in the U.S. Prepare for a Successful Career" and "Tips on How to Build a Great Resume and LinkedIn Profile."
5. Create and share special reports.
"Many salespeople find it challenging to get from an initial phone call to a face-to-face sales meeting. Most of the time, it's because they're failing to provide anything of value to their prospects.
"Your prospects are constantly wondering, 'What’s in it for me?' Demonstrate the value you bring to the table by putting together a short report of trends you’ve observed in the industry. Share it with prospects, and watch how much more willing they are to meet with you when they realize what kind of value you have to offer."
6. Host your own event.
"I've personally found this to be the most powerful strategy for growing my own business, so I host two private events every year. First, rent out a space in your city that feels exclusive and special. Next, prepare to offer something of value to attendees. You can share insights based on your unique perspective, and invite other speakers to do the same.
"Finally, invite your top clients and encourage them to bring others who may find value in what you'll share. Ask everyone in your network for introductions to people who may be interested. This is a great way to establish yourself as a helpful expert, meet new prospects, and fill your calendar with meetings."
Hosting an event has been a successful strategy to attract new clients for CareerLight, company that provides customized career training for international students to help them prepare for a successful career. The following posts provide an overview of those events: "Helping International Students in the U.S. Prepare for a Successful Career" and "Tips on How to Build a Great Resume and LinkedIn Profile."
7. Conduct a small study.
"Although some scientific studies require years of research and thousands of samples, you actually don’t need very many people for a sociologically sound study. Send a survey to 20 clients, or simply ask the same few questions anytime you talk to a customer.
"Record the responses and compile your data. Then, share what you learn with prospects. This is a unique and powerful way to offer value and boost your credibility. As a result, prospects will want to set up a meeting to learn more from you -- and ultimately do business with you."
"Although some scientific studies require years of research and thousands of samples, you actually don’t need very many people for a sociologically sound study. Send a survey to 20 clients, or simply ask the same few questions anytime you talk to a customer.
"Record the responses and compile your data. Then, share what you learn with prospects. This is a unique and powerful way to offer value and boost your credibility. As a result, prospects will want to set up a meeting to learn more from you -- and ultimately do business with you."
And if you must raise capital for your startup, this article provides ten useful tips:
1. Relationship building is crucial for raising startup capital – start early
2. The venture community is small, don't burn bridges
"This one is pretty self-explanatory. The venture community is shockingly small. Any burned bridges may eventually come back to bite you, particularly when you are looking to raise funds. Our best advice? Don't burn bridges – you never know when a past relationship will come back to haunt you."
3. Build passion into your pitch, every day
"The hardest job you will have as a CEO is keeping the passion alive, and as hard as it may be, it is your responsibility to bring that passion every time you pitch. This is more than just for investor meetings, but for when you pitch candidates and employees."
4. Follow up three times
"Absolutely follow up three times with an investor. No, you will not be scaring them away. Now, don't do it over a two-day span, but over a two to three week period. Follow up quickly and consistently."
5. Pre-qualify your investor
"Pitching to investors shouldn't feel like a monologue of 20 facts listed by order of importance. Be sure to make pitching a dialogue, which entails prequalifying an investor. ... Prequalify investors to maximize everyone's time. Quickly establish the investor's investment criteria. Before going into your full pitch, find out if an investor can provide the minimum capital you're looking for and if they invest in your sector."
6. Don't run your business like fundraising is the main objective
"While your main goal as CEO is to fundraise, you need to be careful not to run your business as such. That means not telling your employees that you need this particular story to be told when raising a Series A or B. No employee wants be working at a company with that's always running to raise the next round."
7. Focus, focus, focus
"The most important thing as a CEO is to have focus and to ensure no one lets you deviate from that focus. Hone in on focus from everything from product roadmap to metrics. Every part of your organization should be aligned with your end story and goal.
"The hardest job you will have as a CEO is keeping the passion alive, and as hard as it may be, it is your responsibility to bring that passion every time you pitch. This is more than just for investor meetings, but for when you pitch candidates and employees."
4. Follow up three times
"Absolutely follow up three times with an investor. No, you will not be scaring them away. Now, don't do it over a two-day span, but over a two to three week period. Follow up quickly and consistently."
5. Pre-qualify your investor
"Pitching to investors shouldn't feel like a monologue of 20 facts listed by order of importance. Be sure to make pitching a dialogue, which entails prequalifying an investor. ... Prequalify investors to maximize everyone's time. Quickly establish the investor's investment criteria. Before going into your full pitch, find out if an investor can provide the minimum capital you're looking for and if they invest in your sector."
6. Don't run your business like fundraising is the main objective
"While your main goal as CEO is to fundraise, you need to be careful not to run your business as such. That means not telling your employees that you need this particular story to be told when raising a Series A or B. No employee wants be working at a company with that's always running to raise the next round."
7. Focus, focus, focus
"The most important thing as a CEO is to have focus and to ensure no one lets you deviate from that focus. Hone in on focus from everything from product roadmap to metrics. Every part of your organization should be aligned with your end story and goal.
"In that vein, a big red flag for investors is a lack of focus. You must be able to speak intelligently about your mission and goals. Focus on which metrics you measure, and having a complete understanding of the market and its nuances."
8. Build your story
"Run your business like your story is your main objective. Crunchbase CEO, Jager McConnell explains how right after he raises a round of funding, he will draft a pitch deck for the next round. Referring back to the pitch deck is a great way to see when you are gravitating away from your story, and to ensure you are always revising and adjusting your story accordingly."
9. Selling metrics vs selling a big vision
"Your goal when pitching is not to have people join your religion, but to convince them that your business is one worth investing in, and will make your investors' money.
"Depending on your business and the stage of your business you may need to decide whether it's better to pitch the hype or your strong metrics. Strong metrics that are eating the competition mean that you may not need to sell the dream because real metrics say the business is working.
"However, putting yourself against competition can be tricky, particularly if they are large companies. Investors will be disengaged if you pose yourself as a scrappy team of 5 or 6 taking on a company of 300."
10. Practice from your pitches
"Identify your top 10 to 20 investors who invest in companies like you, are top tier or are competitors of competitor investors. Then put this list aside.
"Practice your pitch with 'junk investors,' and wait until your pitch feels organic. Junk investors aren't necessarily bad investors, but they are the investors you're okay not getting your pitch perfect with or not winning. Strategically select when and who to talk to, because you won't get a second chance to pitch right."
What are your recommendations for how a startup can generate sales?
Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.
8. Build your story
"Run your business like your story is your main objective. Crunchbase CEO, Jager McConnell explains how right after he raises a round of funding, he will draft a pitch deck for the next round. Referring back to the pitch deck is a great way to see when you are gravitating away from your story, and to ensure you are always revising and adjusting your story accordingly."
9. Selling metrics vs selling a big vision
"Your goal when pitching is not to have people join your religion, but to convince them that your business is one worth investing in, and will make your investors' money.
"Depending on your business and the stage of your business you may need to decide whether it's better to pitch the hype or your strong metrics. Strong metrics that are eating the competition mean that you may not need to sell the dream because real metrics say the business is working.
"However, putting yourself against competition can be tricky, particularly if they are large companies. Investors will be disengaged if you pose yourself as a scrappy team of 5 or 6 taking on a company of 300."
10. Practice from your pitches
"Identify your top 10 to 20 investors who invest in companies like you, are top tier or are competitors of competitor investors. Then put this list aside.
"Practice your pitch with 'junk investors,' and wait until your pitch feels organic. Junk investors aren't necessarily bad investors, but they are the investors you're okay not getting your pitch perfect with or not winning. Strategically select when and who to talk to, because you won't get a second chance to pitch right."
What are your recommendations for how a startup can generate sales?
Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.
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