Get All Access for $5/mo

How to Raise Money Now

By Jennifer Wang

Opinions expressed by Entrepreneur contributors are their own.

So you wanna raise $1 million. That amount's probably too much for one or two investors, but not enough to interest VCs, says Asheesh Advani, Entrepreneur's speaker for the "How to Raise Money Now" breakout session at the 2011 Growth Conference in Atlanta.

Advani, the former founder and CEO of peer-to-peer loan management firm CircleLending and author of the book Business Loans from Family and Friends, feels your pain. (On first-round fundraising for CircleLending: "I probably was rejected 80-85 percent of the time," he says. He shared what he learned:

1. Tap your network for investors willing to part with a smaller amount of money. Investors who part with less than $25,000 are more "patient." Since they don't need repayment immediately, they won't be on your case--and that will allow you to stay in control of the timeline of your business plan. Feel free to try banks and VC firms, but don't forget about the nonprofessionals, because almost 90 percent of startup funding comes from family and friends. Crowdfunding sites (Kickstarter, PeerBacker) are an option, too.

2. Develop a fundraising plan. A business plan isn't the only thing you should devote time to. A to-do list: make a list of prospects; work and refine your pitch; expand that prospect list; and decide on a closing date for your fundraising round. Build your projections with costs first--not revenues, which aren't as easy to predict. Then update the numbers every quarter.

3. Refine your "kitchen table" pitch. Here, it's not about selling your idea, but about educating people about what your business is all about. If you can develop a tangible version of your product, do it. Then, be clear about what happens if the money can't be paid back, and provide options for funding amounts and repayment terms.

4. Do your research (duh). Be careful about using intermediaries, like brokers, financing consultants and microlenders, as well as crowdfunding sites.

Bonus: Advani's inspirational quote, from Warren Buffett: "You only have to do a few things right in your life so long as you don't do too many things wrong."

Jennifer Wang

Writer and Content Strategist

Jennifer Wang is a Los Angeles-based journalist and content strategist who works at a startup and writes about people in startups. Find her at lostconvos.com.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Side Hustle

Top Secrets to Starting a 6-Figure Etsy Side Hustle That Earns Passive Income, According to 3 People Who Did It

Etsy remains a popular ecommerce platfrom for sellers — and can be incredibly lucrative for those who know how to use it.

Thought Leaders

10 Simple, Productive Activities You Can Do When You Aren't Motivated to Work

Quick note: This article is birthed out of the urge to do something productive when I am not in a working mood. It can also inspire you on simple yet productive things to do when you're not motivated to work.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Leadership

Stop Sabotaging Your Own Success — Kick Unproductive Thinking to the Curb With These Tips

Want to streamline your business and take it to new heights? You need to learn to stop the negative thought processes that lead to unproductive thinking. Here's how.

Business News

Amazon Is Thinking About Charging Extra for AI Alexa

"Hey Alexa, how much are you going to cost?"

Business News

SoftBank CEO Says AI 10x Smarter Than Humans Could Be Here in a Matter of Years

SoftBank CEO Masayoshi Son spoke to shareholders during the company's general meeting on Friday.