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This business coaching episode provides information on how to raise venture capital.

Results-Focused Training, Tools, and Workshops from Expert Business Coaches.

Featured Coaching Excerpt - Notes & Transcript, Part 1
  • The Five Super Moves: 1) Angel-Listing
  • The Five Super Moves: 2) LinkedIn Trolling
  • The Five Super Moves: 3) Headline hunting
  • The Five Super Moves: 4) Relentless networking
  • The Five Super Moves: 5) Dream 100 move
  • Action Step: Make a physical board with all 100 contracts and make sure they are reached five times.
  • Lesson Nugget: Research successful companies that are similar to yours and find out who funded them.

[MUSIC PLAYING] 

 

-When you're calling these people, are you asking for them to invest, or asking them for who they know?

-Business coaching tip: When you start a business, what youwant to do is after you have your list of your dream 100, you're going to go onto LinkedIn, and you're going to see who's connected to them. And if anybody is one connection away, which a lot of people are, you call them.

-Got you.

-Make sense?

-Yeah, that makes sense.

-So LinkedIn, you can use the tool on LinkedIn. Circles, the circles. You can see on the LinkedIn screen if someone is connected to somebody else. Hopefully, if you're watching this, this makes sense to you. If not, we'll have some cool episodes on LinkedIn coming up here shortly. You can watch those as well.

-And I know that there's the five super moves of angel listing. You mentioned LinkedIn trolling. Touch on a couple of those others.

-Yeah. Well, your super moves you have here, there's move number one, OK? And this is I would call angel listing. Business coaching lesson: And what this is is you'll go on AngelList, and you're going to look for the people who have invested in the kinds of business that year you're looking to start, like we talked about earlier. Angel listing. Go on AngelList. Look for-- for venture capital funds that have invested in your kind of business. Even in your stage. You know, there's some venture capital funds that will not invest in startups?

-Right.

-Some that will not invest in companies that are not startups, like they only invest in companies that are already established. Some companies invest in like jet fuel for established companies. So like if it's a company that's already doing well, they come in and invest to help them grow nationwide.

-Gotcha.

-So, I mean there's all different kinds of funds. And the second is LinkedIn trolling. Go on LinkedIn and look for the people that know those people. That's how you do it. OK?

Business coaching advice: Now the third move is headline hunting. If you read "The Wall Street Journal," there's a newspaper called "Investors Business Daily." Or if you get "The Wall Street Journal," or if you want to go onto PandoDaily, look up the name of the companies that are written about on the news headlines, and then look up and basically research who funded them. So if you saw a story written about, let's say, Dropbox, look up Dropbox, and then see who funded Dropbox. And you can find it, and that becomes your list. OK?

The fourth move is you want to do relentless networking. And by that, I mean you really, really do have to get out of your comfort zone, and you have to start networking. As an example, there's one restaurant in the Silicon Valley area called Buck's. B-U-C-K-S, Buck's. Possessive, Buck's. And at Buck's, that's where most venture-- that's where a large number of venture capitalists eat breakfast.

-Really?

-Yeah. So like, go to Buck's. You need to meet these guys at parties. If you live in the area, seriously, go to where they are. You need to call the business coaching people you know. You have to network. You cannot stay in your house and hope they're going to call you.

And I hope this makes sense to you, but you as an entrepreneur can control your destiny. You can truly decide what your future is going to look like. But if you're watching this, and you have kind of a fixed mindset, as Doctor Dwyer-- she's a PhD from Stanford-- she calls it a fixed mindset where you believe that your future is predetermined, and you cannot control it.

Then you need to not do this, because this is all about you altering your destiny by being delusional enough to believe that one of these 500 companies in the world is going to invest in you. You have to believe that you're that awesome. And I believe you're that awesome, but do you believe you're that awesome?

-Right.

-And then the final one is the dream 100 move. Well, on the dream 100 move, what you'll want to do is just make a list somewhere where you can see it visually at your house. Business coaching lesson: So if you were the one raising money, I'd say, Caleb, take a dry erase board, make a list on there of the 100 potential venture capitalists that you want to get in touch with, and put them up on the board, and make sure that all 100 people on that list hear from you five times over the next five months.

-We have that in our office for our [INAUDIBLE].

-We do. That works in almost every industry.

-Massive board on the wall.

-You've got to have the boards, I'm telling you. Because what happens is if not, you'll go, I want to reach out to that fund. So let's say Sequoia is a fund you want to reach, but then you're reading a magazine, and you go, oh, I should also-- I should also reach out to this

-Right.

-And then that one. And you meet a guy at a party, and you say, I should call him. And then all of a sudden like, you forget these people. But if every time you have a lead you put it on the board, you won't

forget.

Learn how to start a business and watch business coaching trainings on Thrive15.com

Featured Coaching Excerpt - Notes & Transcript, Part 2
  • Definition Magician: Diligence - Constant application of consistent effort
  • Action Step: Go on AngelList and LinkedIn to find investors and venture capitalists to put on your Dream 100 list.
  • Notable Quotable: "Coordination of knowledge and effort, in a spirit of harmony, between two or more people, for the attainment of a definite purpose. No individual may have great power without availing himself of the "Master Mind." - Napoleon Hill
  • Action Step: Commit to making a Dream 100 list within the next seven days.
  • Action Step: Research the venture capital firms that are funding companies similar to yours.

[MUSIC PLAYING]

 

-Now, just so you guys know, he touched on networking. I would highly suggest you go back and watch some of those business coaching for networking episodes as well. Because we really break down how to do that strategically and successfully.

-Absolutely.

-And that's a big part of this, what did you call it, the relentless networking there. But, Clay, as somebody who's not necessarily known for his patience, I don't think that's a virtue that's usually attributed to you. This seems like something that would take a lot of patience, no?

-Yeah. It's a weird deal. Because the word diligence is the one I would think of here. It's a constant application of consistent effort. Business coaching advice: So you have to be patient knowing you're not to get the answer tomorrow. But you have to be diligent and continuing to apply effort.

And I'll give an example. There's one of the celebrities that you've helped drum up for Thrive. We can't talk about him yet, but we will soon. But he's a guy who's very busy.

And he's got a lot going on, which is why we want him on the show.

-Right.

-And so we've been pursuing that for probably 40 or 50 communications, either email or call or text.

-Over and over and over.

-And it will happen. And when it does happen, we'll feel good about it.

-Yes.

-People will be like that was an overnight success for you guys. Business coaching realization: So just to understand, the overnight successes usually happen as a result of a daily application of effort over a year period of time.

-OK. So I'm watching this. What action steps do I have right here?

-Well, right now, if you're watching this, break down these five super business coaching moves. One, commit to making a dream 100 list by the end of this week.

-Physically write down that dream 100.

-By the end of this week. There's all sorts of studies out there that show that people who do not take action within 72 hours of hearing new information never do it.

-Right.

-So I'm just telling you, take action right now to get this done within the next week. You got to get it done. Has to be done by the end of the week.

-OK. Good.

-Two, on your dream 100 list, you might have only 45. And then go through our moves. Go on AngelList, fill it up. Find those investors. Put them on there.

-Good.

-Go on LinkedIn, fill it up.

-OK.

-Business coaching hint: And draw it out like a family tree. Here's the middleman for this person. So you want to put on there, you say, well, this is the venture capital firm I want. Greg knows this person. Tom knows this person. Ed knows this person. OK.

These are your middlemen. So you need to go ahead and make that system. Then the headline hunting. Grab the publications, get on PandoDaily, get on Wall Street Journal, find out who's funding the companies that are similar to yours. Find them, OK.

The final business coaching tip is do some relentless networking.

-Yeah.

-I'm talking about some intense networking. I'm talking about you've never had more coffee and breakfast in your life. You are meeting people that you've never met, you're stepping out of your comfort zone, there's not a day you're not getting rejected. That's what you have to do.

-Boom.

-Bam.

-That's just a matter of actually taking the steps and doing it. Because we've outlined exactly what five things you need to do. Now you just got to do it.

-Yep.

-All right. Number four, why you need to focus your attention on the middleman to get an introduction.

-Yeah.

-So, initially, I feel like when we think about raising venture capital, it's easy to focus on that person with the money who would be investing. But you're saying don't focus on that right now.

-Do the family tree like I was talking about. Draw on your board the middlemen that know those people.

-Now, talk to me about the Master Mind. And how does that relate to the middleman?

-Well, not Napoleon Hill, now, he defines the Master Mind as basically the "Coordination of knowledge and effort, in a spirit of harmony, between two or more people, for the attainment of a definite purpose. No individual may have great power without availing himself to the 'Master Mind.'" What happened was is Andrew Carnegie, the world's wealthiest man at the time, discovered that basically wealthy people all have a Master Mind.

They all have a network of wealthy people they surround themselves with. And that's how they become successful. And so you're going to have to understand that wealthy people hang out with other well-to-do people. They're not like snobs.

But as a general rule, I mean, if you're a hard-working person that worked your way up to the top and you live in an exclusive neighborhood in California, you probably have neighbors that also have exclusive houses.

-Right.

-Unless you've decided to make a lot of money and then stay in the community you grew up in, I mean, I'm sure there's somebody like that. But as a general rule, the higher up people go in the food chain, they start to live in gated communities.

-Right.

-They start to go to certain dinners, be a part of certain clubs, and so they only know people who are successful.

Featured Coaching Excerpt - Notes & Transcript, Part 3
  • Lesson Nugget: When searching for venture capitalists, find a way to get into their world. This could lead to your next big investor.
  • Notable Quotable: "Good companies should be able to be described simply in a sketch, on a napkin." -Phin Barnes
  • Lesson Nugget: Investors are people, too. Don't talk at them; talk with them.
  • Action Step: Have a great idea and then minimize the risk.
  • Notable Quotable: "The major components of an elevator pitch are traction, product, team, and asocial proof. And investors care about traction over everything else." - Pitching Hacks

[MUSIC PLAYING]

-Can you talk business coaching advice about here your net worth being determined by your net work oftentimes?

-Yeah. So, you really have to find a way to get into that world. So, you've got to figure out what country clubs these people go to. You got to figure out what social circles they're in. And you need to reach out to all the people within that social circle that you can get in front of.

-And I've heard you say, there's no shortage of capital in the world, but there's a shortage of good ideas, I think you say. What does that mean?

-Well, as a general rule, what happens is people who come to me and they say, hey, I'm thinking about raising capital for my company, do you have a suggestion? I say, let me see here your business plan or your idea or your pitch deck. Let me just see something. And usually the idea is so awful that nobody in their right mind would invest in it. And the reason why is not because there's bad people, but it's because they don't think through the process. So what we're going to try to do is to teach you the 14 steps that you need to think through. Because I can tell you this, when I tried to raise capital initially for some of my businesses, I had some bad pitch decks. I had some bad business plans. Business coaching truth: I had some bad-- so, you got to understand people aren't going to invest it if it's a bad idea.

-Right. But also you mentioned it earlier, but it's got to have a high enough ceiling to interest venture capitalist, right? It's got a be a potentially highly profitable business.

-Yeah. I mean, if you're a young guy. You're 25 years old watching this. Or you are a lady who's 30 years old watching this. And you have this dream of starting a business, and you've never started a business before-- well, nine out of 10 businesses fail anyway. So, what's the probability that you're going to fail anyway? And then what's the probability that you're going to fail with my money? That's pretty high. But what if you have a great team of people that are advising you? What if you have a lot of experience? And what if you have a-- now, all of a sudden the risk factor start to go down. So, what you want to do is come up with a great idea, and then minimize all the risk.

-So, that's the action step right there?

-Yeah. Business coaching advice: You can have a great idea and minimize that risk.

-Awesome. Number five. The business coaching definition of an elevator pitch.

-Yeah.

-Now Phin Barnes, of first round capital, says good companies should be able to describe simply in a sketch on a napkin. What does that mean?

-What happens is a lot of times when you have a great business idea, you're so excited that you talk about it, you think about it, you dream about it, you really-- but what happens is you have a really hard time explaining it to anybody.

-Just ramble on and on and on.

-So someone says, well, Clay, tell me about your business. And you're like, well, what it is is it's a-- and then five minutes later you still have not finished talking. Now, what you should be able to do is you say, Clay, tell me what your business is. And you should go say, well, Thrive provides entertaining education for entrepreneurs. And then if you ask, well, can you tell me more? You should have your clarifier ready to go. And you can say, well, yeah. Thrive provides mentorship from millionaires and everyday success stories. Huh.

-So, you've got your elevator pitch and little clarification.

-Yeah. So if someone asks you, you can clarify it. But usually we have a 10 minute word vomit where someone says, well, tell me about your business idea. And, raw, and then 10 minutes later you're, raw, and you won't stop doing that. And it's kind of gross.

-Right.

-But think about this for a second. Have you ever gone out to eat with somebody or talked to somebody where they talked at you the entire time?

-Yeah, of course.

-And it just doesn't feel great. So, when you're talking to an investor, they're still, they're humans.

-Right.

-And they don't want you to just sit there and talk at them for 70% of time. And if I had a taser, and I tasered myself for every time I was guilty of not following some of these rules before I learned these things, I would be in some severe pain. I'd probably still be tasering myself right now.

-Well, Pitching Hacks actually defines this. Just want to go over this real quick. You can find it well. Pitching Hacks says, the major components of an elevator pitch are traction, product, team, and social proof. Investors care about traction over everything else. What do they mean by traction?

-Traction is are you producing results so far? Most venture capital firms only invest in companies that are already starting. I don't know if that makes sense. But most venture capitals only invest in a company that actually exists. So, it's like you already have one prototype. Now, some here like-- some of you watching this might say, yeah, but you Elon Musk, they invested in Tesla. Well, Elon Musk put up a ton of his own cash. He had a track record and that he built Paypal successfully. And so now he's asking for more money. Well, he did pretty well the first time. I think it's worth investing in. But very few people-- like a Mark Zuckerberg started Facebook. The company was already a working prototype before he got capital.

-Business coaching truth: So, if you're trying to do capital with just an idea, nothing to show anybody, that's a lot more difficult.

-It's tough. And that would be an angel investor that you're looking for. And you'd want to find a specific venture capital fund that specializes in funding start-ups form the very beginning. Or a program called out Y Combinator. Y Combinator is pretty big, and that's a company that helps incubate people with the good ideas who maybe need the infrastructure and some business coaching to build a successful company. And Y Combinator is great. They've produced Dropbox, Airbnb. Quite a few different companies have come out a Y Combinator.

-Cool. Paul Graham is the one that heads up that program, and he's the boss.

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