Fundraising expert at IE Business School

Entrepreneur session 2:

 

Jorge Mota

  Most would agree that one of the very important elements in any business is $$$!

Unless you are loaded with cash and can spend it as you are pleased, at one point or another, the thought of raising capital to start or to grow your business may become necessary.

Is it a daunting idea?...not necessarily. But it is an options which should be given some serious thoughts. 

Jorge Mota who were our guest here at IE Business School and a very successful entrepreneur who has continuously managed to raise substantial amount of capital gave the class some valuable insights.

Surprisingly, he made a comment that the dollar is green everywhere, or in other words, make no preference to your investors!! 

Unless I have misunderstood this comment, I am to some extend confused. We have over and over been told that it is utmost important to choose the right investors for your business and it is not simply the cash that adds value to the business but the experience and the network the investor brings. But the person who has been extremely successful in raising capital has a different view?

As I mentioned, I could have misunderstood this comments as my information has been gathered reading the class blogs and the real time twits that were shared during the class. Unfortunately, I was unable to attend the class... as ironic as it was, I was busy with a big European grant application for my own start up which had to be filed by today and after filling out god knows how many forms and preparing 100s of documents, we found some small prints related to UK companies which resulted in delaying this application until September...that is another story however!!

Jorge's other view was that business angles should be treated as part of the family, since their capital is primarily invested in you and not necessarily in your idea! He suggested to ensure great return for the business angels as they deserve this more than anyone in the business.

Another important tip he offered was to never give away more than 35% equity in the early stages of your business.

He also emphasized on the importance of the key management and their commitment in the business as this would be the absolute first thing any investor would consider. 

I would personally add to this... I think choosing your partners right from the very early start is one of the most important things to consider. There are many different views of how to choose the right partner, but I would say it is a combination of everything. 

First you must feel right about your partner and really feel that you can work well together. (sounds obvious but more than often ignored) 

Second, his/her skills should be complimenting yours and you should never just choose a person because of friendship.

Third, regardless of how much you trust one another, business is business and so it should be treated this way (an advice that I often oversee myself btw) 

Fourth, treat your partner as you wish to be treated yourself. Motivation is key in any business and credit should always be given to achievements. Its not about showing off to your partner who did what. Its about keeping each other motivated to accomplish the goal! 

One last advice... As 'wrong' as this may sound, it is a very good idea to examine your partner's personal life. Most people are effected by this to such an extend that it will influence their professional performance... so this part should be considered carefully! 

As important as capital is for the operation of an enterprise, people running the operation still remain the most important!

...so before raising the big capital, ask yourself... am I in this for the money...for friendship...for  passion...for ego...for love?

....or perhaps a healthy combination of the above!

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