February 25th, 2013 14:33 EST
Entrepreneurs Learning How to Raise Capital
As much as the entrepreneurs that I come into contact work hard to raise capital, have ideas for businesses, have plans for creating jobs and have road maps for building wealth, the access " the capital that they need to get there is not always forthcoming.
It is unfortunate for many of these entrepreneurs that most of them will never raise the capital that they need. Some will get a little bit of the capital but most will fall so far short from their goals that they`ll never accumulate the number of dollars that are necessary to make the dreams that they have come true. Unfortunately, there isn`t anything in the constitution of the United States that says that access to capital is guaranteed and that if you try, you`ll get some.
The capital markets are very fickle. The institutional players are especially tough, so forget about them for now. Working with retail investors, just regular folks who have money in a bank account, such as a retirement fund, are a lot easier to deal with and probably a lot more willing to take a modest stake in the company or they`ll accept a more modest return on their invested capital. There are several reasons for this and partly it is because they don`t entirely know what their own capital is worth. Ironically, the entrepreneurs trying to raise the capital generally don`t know what it is worth, either.
Pricing the money and putting out a deal that is attractive to investors is so critically important and it`s terribly difficult. It`s very important to price your money correctly and to ask the right people for the capital you`re trying to attract.
For example, if you`re someone who operates in the real estate area, doesn`t it make sense to ask investors if they like real estate? Isn`t it a mistake to assume that real estate is attractive to them? If you`re trying to raise money for a healthcare venture, doesn`t it make sense to attract people who either understand healthcare, or who have expressed interest in healthcare opportunities?
I can tell you from personal experience that people who like to invest in businesses are not necessarily the same people who like to invest in real estate. And sometimes people who invest in real estate like to invest actively in real estate. That means that they want to buy the building and manage it themselves. They like collecting rent, they like interacting with tenants, they like being in charge and they want all the capital that is generated from this building for themselves.
There are other investors who want passive opportunity. They want the opportunity to have their money managed for them, and those are the investors that a real estate professional who raises capital has to find.
It is absolutely possible to find capital, and it is possible to find capital in the sums that you`re looking for if you`re willing to be reasonable and smart about how you go about doing it. But if you target the wrong group, if you fight somebody the wrong way and if you ask for the wrong amount of capital, there is a very good chance that you`ll fail. And that failure will be painful. So be careful and be thoughtful when you move into the capital raising environment, because it is not a constitutional right and no one says you get to succeed. But lots of us do succeed. It`s all on you, so do a good job.
P.S. The Deal Making Symposium and Syndication Seminar focuses on 3 primary areas and from reading the above material, you can see why:
1. Learn how to price the capital so that an investor can say yes ";
2. Learn how to price the syndicator`s services so that you will be happy with the deal; and
3. Learn how to find and communicate effectively with the right investors.
Joel is CEO of Bullseye Capital , a full-service real estate company supporting owners and buyers of real estate assets with brokerage, leasing, property management, and mortgage services. Joel is also the founder of the Bullseye Capital Real Property Opportunity Fund, LLC which is an investment company that acquires distressed real estate by working with accredited investors.
A leader in real estate syndication, we offer seminars to assist others in acquiring the skills needed to raise syndicate capital to acquire properties. Imagine knowing how to pool funds to purchase any real estate investment, whether single family, multi-family, commercial, or anything else. For more information and complete details, please go to http://www.syndicatefast.com/.
P.S. To discover how to gain capital to grow your real estate business exponentially Harnessing the Power of Syndication
Hedge Fund Guru, Joel Block: Distressed Property Profits Interview with Judyth Piazza on The American Perspective Radio Program