I am amazed that this topic is absent from our school systems.
There are two very important reasons to know how to properly raise funds.
One, it often is the difference between success and failure for anyone wanting to start and grow their Company.
Two, and equally as important, it is a highly regulated field with major legal consequences for not doing it correctly.
You would think that if all of the above was at stake, it would at least be taught in high schools and colleges for at minimum a semester.
You may be wondering, how does money raising contribute to the overall success of a Company? I am sure many "would be" great companies died on the vine because they couldn't get this part down.
They have a great concept, super smart people, and all the motivation needed to be able to execute, but were missing this key component.
Think of how much faster ideas and products could come to market for the end user if this was taught to people in school.
With this knowledge, companies would have a far greater chance of success AND not have to give away significant amounts of their company to a VC firm looking to take advantage of a green entrepreneur.
You may also be wondering, why should I spend time and money figuring out the right way to do this? I would definitely suggest to anyone that is looking to start a business that they speak to a GREAT Securities Attorney about the rules of structuring deals and raising funds.
Many Entrepreneurs think that they can just ask for large amounts of money from strangers-and that my friends, is far from the case.
I cringe when I interact with Entrepreneurs who are raising money incorrectly because they don't know any better.
Then again, why should they know-most people don't.
It's really only known by a very small and selective group.
Groups such as Security Attorneys, VC's, Angels Investors and top executives at Corporations like Goldman Sachs.
These groups definitely do not want the masses knowing how to do this, as it would increase competition and decrease their collected fees.
Yet, the governing agencies expect you to know.
My advice - Like anything, it is far less expensive to spend a few thousand at the beginning of your career and do it the correct way right up front.
This allows you to keep a greater percentage of your company and stay out of legal hot water.
More on this subject will be posted over time as I feel that it is very helpful to young Entrepreneurs.