Lesson 4
- How to Raise Money Abroad
by Gary Scott
Venture capital is usually the hardest of all
capital to raise. When trying to get venture capital from an individual, the "Ten
Times Theory" is always in effect. This theory says that for every zero you
add to the amount of venture capital you want, the task becomes exponentially
harder by a factor of ten.
To find a person who will lend you ten thousand
dollars of venture capital is 10 times harder than a thousand. To get $100,000
of venture capital is 100 times harder than ten thousand of venture capital and
raising a million of venture capital from one person is 1,000 times harder.
Private investors with a million dollars of
venture capital lying around to invest are few and far between. And private investors
who are WILLING to invest a million in venture capital are even fewer and farther
between.
We have raised venture capital abroad from individuals
to expand our market and to avoid narrow minded views of institutions in the past.
Lesson #3 of this course showed us how to take
advantage of distortions to obtain venture capital and ended by explaining how
the borrower had created a limited partnership to expand the number of venture
capital investors he reached abroad. This lesson helps with ideas on how to expand
your potential venture capital sources overseas by overcoming the confidence crunch.
Individuals with a million dollars of venture
capital may be individuals, but they act like institutions. We enhance our chances
of success in raising venture capital if we create paths for investors to lend
or create situations where they invest less venture capital per investor.
Advertising abroad is an excellent initial way
to attract private venture capital investors quickly, but this can be expensive.
Most media do not give your money back if the venture capital ad fails.
When you advertise for venture capital, you
need ads that attract as many venture capital investor- lenders as possible (without
creating a legal crisis by creating a public offering). One way to do this is
to make initial venture capital investments or venture capital loans small as
is practical.
This is for two reasons to keep your venture
capital needs low. First, there are more investors with a little venture capital
money than with a lot. Second, the biggest challenge in venture capital fund raising
is the creation of confidence. International aspects of fundraising, i.e. distance,
differing cultures, language and idiomatic obstacles, etc. hinder confidence.
One way to reduce these confidence blocks is
by starting small so your venture capital investors can get to know you without
great risk. The best way to create an international venture capital financing
and or sales system is with a long-term plan that uses centers of influence and
repeat business.
Step #1 is to have a small venture capital option.
This does not mean you cannot have a venture capital investment or loan for large
amounts as well. Good venture capital investment packaging matches your needs
and the cost of the marketing itself in large and small amounts.
Step #2 in developing venture capital confidence
is to have a good business plan in your offer. We look at how to do this in Lesson
5.
You can increase profits, enhance security
and have extra tax and asset protection. Turn your passions into profit. Start
your own international business now! Learn how to raise money abroad.
Find out more about our complete course
International Business Made EZ at Garyascott.com
Until then, good business wherever you
are and go!
Gary
Sometimes
one picture is worth a thousand words
Global Business expands your horizons
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