Many young entrepreneurs don’t realize how hard the funding process is. You hear all day about these companies getting tons of money and it seems like VC money is flying around everywhere. However you don’t hear about the 1000s of ideas that are shot down or never got that funding they were after.
Business Insider published a story about the fact that many first time entrepreneurs never get funding.
“I thought getting funded would be as simple as pitching my idea to a smart VC and getting a check based on the magnitude of the idea.” The author then says “Two different first time entrepreneurs in their early twenties both made some version of this comment to me in the last month.”
As the author says the reality is that if you have not previously built a business your odds of being funded are very low. The truth is many investors hear reasonable ideas all the time for businesses but a lot of the decision comes down to the person behind the idea. What is their reputation and history? The right person can turn a bad idea into a market leader and the wrong person can turn an amazing idea into a failure.
So how do you get past these obstacles? The article offers a few pieces of advice:
- Turn to your network. Who do you already know who believes in you that can provide any amount of money?
- Look to investors in your businesses industry. Especially if they want to be an advisor or mentor on the project.
- Keep building you businesses without funding. The more you show the idea is valid the better chance you will have over time of getting the funding.
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