Should I hire a consultant to help me raise funding from outside investors?

Yes, assuming you have not successfully closed a similar round of financing before, this is a good idea that will generate a large return on the investment. It is likely the difference between success and failure, or at least getting a deal done in six months instead of two years of very expensive “learning”.  The financing process is complex, and most will learn the hard way over many months or even several years of mistakes.  The lost opportunity cost can be millions.  This is super dumb when compared to spending a few grand on a quality consultant with experience in this area. Not a “finder” though. They are mostly scammers.

Most will absolutely need help with the following tasks, ideally from an experienced CEO that has done this exact task before:

1. Validation of your market entry strategy. This is key, and most people get it wrong with a short-term vision instead of a multistep entry that broadens the company’s focus to larger markets over a few years. This allows you to be a big fish in a small pond early on and not compete with 800-pound gorillas.
2. Review and development of your strategic plan, which will drive your pitch deck
3. Development of a financing strategy and plan. This includes a financial simulator and 3+ year strategy for the tranches of money needed that will attract investors by showing the bump in their share price as key milestones are achieved.

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1. Key decisions on the category of investor to approach at each stage and funding round, which is likely more than one round for most.
2. Developing a target list of specific investors that are appropriate by the four to five factors that will narrow the list to a manageable size. This means narrowing a list from hundreds of thousands to fifty or one hundred you may approach.

   

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3. Potential support by attending key presentations to show depth of experience on your team.
4. “Fresh eyes” that are not so close that they can view everything objectively. Founders are often so close they skip key sales points that they assume others know when they do not. This can prevent the investor prospect from connecting the dots.

This is not about being “smart”, it is about having actual experience.  These things are more “Art” than “skill”, requiring many years’ experience to do well.  And without these skills on your team, you will likely add six months, or potentially even years, to your fundraising process. Or never raise money at all, wasting all your time, effort and spending.

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Bob Norton is a long-time Serial Entrepreneur and CEO with four exits that returned over $1 billion to investors. He has trained, coached and advised over 1,000 CEOs since 2002. And is Founder of The CEO Boot Camp™ and Entrepreneurship University™. Mr. Norton works with companies to triple their chances of success in launching new companies and products. And helps established companies scale faster using the six AirTight Management™ systems. And helps companies successfully raise capital.

Call (619) SCALE06 or email [email protected] for a complementary strategic consultation.