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You’ve likely heard the adage, “it takes money to make money.” While this is generally true, most business and real estate entrepreneurs will tell you it doesn’t always take your money to make money.
The idea of leveraging “other people’s money,” also known as OPM, has become extremely popular in the post dot-com world. From single purchases of real estate to multi-billion dollar private equity purchases, leveraging the money of others has become a distinct part of our financial culture.
If you are a person of vision who can create value in a business, real estate or any other type of investment transaction, the opportunities are truly limitless, regardless of whether you have the funds to do the transaction on your own. But raising funds from outside sources can be tricky. The Securities and Exchange Commission (SEC) has regulations that both protect and restrict average investors.
Potential funding sources range from banks and credit cards to friends and family to angel investors and venture capital funds. With so many avenues, it can be difficult for an investor to decide where to start.
Find your message
The first step in raising capital is to identify “what your story is and how well you can articulate your story,” Dave Parker, CEO and founder of 9SPACES, Inc., who has successfully raised millions of dollars for his own companies and others, said.
Angel investor Scott Greenburg, who invested with Starbucks and T-Mobile in their early stages, said the first thing he looks for in an angel investment is a message and a messenger.
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Author: Elizabeth Smith
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