Are you an entrepreneur with a great idea but no clue how to raise the money to make it a reality? Well, look no further than new Amazon bestseller The Big Raise: The Four Stages of Raising Capital for Start-Up Owners and Entrepreneurs. Written by financial professional Michael Miller and attorney Alexander Baker, it’s a guide to raising money produced by experts who understand how to explain Venture Capital in accessible terms. No, this isn’t your dad’s business book! It’s a twenty-first century guide to securing startup funding in an increasingly competitive climate.
Since he’s a personal friend of my family, I called co-author Michael Miller to ask a few questions about his hit title, and how it can help demystify Venture Capital for you. Enjoy!
The Big Raise: The Four Stages of Raising Capital for Start-Up Owners and Entrepreneurs
ADDICTED: What inspired you and co-author Alexander Baker to start writing The Big Raise?
MICHAEL MILLER: Working in venture over the years, I kept noticing a frustrating trend where founders with truly exceptional ideas weren’t successful in raising capital because they simply weren’t familiar with the fundraising process. It wasn’t uncommon to see entrepreneurs inadvertently make a critical error or omission which hurt their prospects when they engaged with investors. Many didn’t even realize where they went wrong. It seemed like a complete shame for someone not to have a chance to achieve their dreams for an entirely preventable reason.
I reached out to my co-author who was working as a corporate attorney in Silicon Valley at the time to voice my frustration, and we decided to do something about this. To that end, we channeled those early discussions into an accessible text that would equip all entrepreneurs looking to raise money for their business with fundamental tools and concepts needed to succeed.
ADDICTED: Can you give us your best elevator pitch for why startup founders should read The Big Raise?
MICHAEL MILLER: Investors need many reasons to say yes to a deal, but only one to say no. The Big Raise is a book that can help you get to “yes.”
It doesn’t matter if you have never raised money before, you have no background in finance, or you have just started tinkering in your garage. We wrote this book with an approach to writing the survey course of raising capital, where we provide you with a broad base of knowledge that includes, financial, legal, and personal concepts. We know that raising money for any new venture can be hard, but this book can make it easier.
ADDICTED: What do you think is the biggest misconception about raising money for a startup?
MICHAEL MILLER: There are an exceptional number of misconceptions we address in the book, but one I’d highlight here is the idea that going through a crowdfunding platform is “easier” than going to more conventional sources of capital. Entrepreneurs may believe that the investors on a crowdfunding platform may be less discerning than a traditional fund, or that their investors might give them a fan premium on their valuation. In other words, they might think those crowdfunding investors will overlook some of the company’s problems and be more willing to send cash on a valuation that should receive more scrutiny.
The reality is that raising money on a crowdfunding platform comes with its own set of unique challenges. Among these include the need to stand out against the sea of competing opportunities on those platforms. You might have a great new green energy solution, but you might find there are a few hundred opportunities trying to appeal to the same type of investor that you are.
ADDICTED: What differentiates a startup that is successful in raising venture capital funds from one that isn’t?
MICHAEL MILLER: In a nutshell – the team.
When you are investing in early-stage companies, you are fundamentally betting on the people involved. A motivated, dynamic, cohesive, and complementary team will be one of the central drivers of a company’s future success. On the other hand, a team wracked with dysfunction or lacking the skills to take a company to the next phase of its corporate journey is a clear red flag for investors. As companies mature, there will always be new key members and new areas of expertise that will be required. From the outset though, investors need to see and engage with a team that inspires confidence.
ADDICTED: If there is one single thing you hope early-stage entrepreneurs take away from your book, what would that be?
MICHAEL MILLER: Persuading an investor to hitch a ride with you is fundamentally about trust.
A prospective investor who does not trust you and does not buy into your story is simply not going to write a cheque. When meeting with investors, every entrepreneur needs to speak and act in a way that builds trust. It can be easy to forget that those who already have a relationship with you will already have an existing level of trust and therefore the path to raise money from them might be shorter. When you are meeting new investors who don’t have that history with you, it is critical that you present yourself with a professionalism that sets the foundation for a strong relationship.
The Big Raise is available now.