The 4th Component of Entrepreneurial Success: Capital

In the first article on this site, I wrote "Energy can be defined as four things in this case (and in most cases): time, capital, action, and commitment.... A successful entrepreneurial enterprise needs high levels of all four components. With these investments- and a decent idea- any business can be Manifested." The time has come to address the most sensitive and mysterious of these: Capital.

I am often approached with the request, "Can you help me get some money?". My answer is, "Sure, how are you selling?" The reply is usually, "Well, I am not selling anything, but I have a great idea!" That's swell, really neat.

There is a series of articles that I will write on this point and I am here to say that I am not the authority on raising money, but I get it. I know how to do it. Let's cover the basics in this article, and we will digress after that.

The bottom line is this: If you want someone to invest money in your business, you MUST show them how they will make a RETURN on that investment.

I am now going to repeat that in many other forms. An idea is worth nothing. Revenue is worth everything. It doesn't matter how great the idea is, you have to be able to sell a product to create value. An idea creates no returns, revenue creates returns. An investor wants to make more money on their money. They do not invest in a great idea, they invest in revenue. If you can't show how you are going to create revenue, your idea is worth nothing.

OK. Now that we got that out of the way, I am betting that at least half of you don't get it yet. The single biggest problem with a start-up is the entrepreneur only builds half the business. Most entrepreneurs start-up with a passion for creation. I don't discount this. In fact, I applaud it. I don't have it. I have a passion for the other half. Taking the business to market. In order for any business to be successful, you have to be able to take it to market.

Therein lies the twist, the mystery and the key to success. In order to be successful, you don't need to have money, you need to be capable of making money. If you can demonstrate this capability, or at least show me a great plan, I can find you investment capital. Angel funds, angels, and private equity will flock to your business.