Over the years, working with a lot of people who need to “raise investment money” from “investors.”
I have seen many not succeed.
I struggled some when I first got started, as well.
It’s not always a bad thing to learn how to fail.
Success could be called what happens sometimes between one’s failures.
It is always good to learn what not to do. It’s not always fun, but it can be good.
Basically, if you are going to syndicate deals as your way to get in or scale your self-storage business, I have seen three general ways small investors doing their first capital raise have not succeeded.
- Relying on your existing sphere of influence to fund your deals.
Always a good starting point.
But in most cases, your sphere does not relate to you yet as an expert in self-storage.
They are rooting for you. But that is way different than funding you.
You will get some capital here, but unless you have really educated this group of people over a period of time, my experience is few really invest.
It takes something for someone to write a $50,000, $100,00, or a $250,000 check.
Knowing you, liking you, and even trusting you are not usually enough to get that kind of investment money from someone.
It takes confidence that you are the one that can use your expertise to turn a profit for them….no matter what they say.
You can start here, but you need to grow your potential investment pool of qualified people.
- Failing to be clear on your acquisition strategies.
If you are raising money, you have to have a story.
A compelling story.
This is your corner of the storage world, and you have staked a claim.
You can’t be changing all the time.
One week, you are all about developing.
Then…wait…we have an expansion to offer you.
No…that deal didn’t work out, but I will soon be showing you a boat and RV project we can get a good deal on.
It is not like you can never change strategies, but communicate that early, long before you have a deal to consider.
In my five-phase strategy, I teach on raising money for small self-storage investors; “educate” is one of them.
Educate your potential inventors consistently on the self-storage space and your acquisition strategies. Also, on how you strategies could help them.
You can never over-communicate or over-educate your potential or actual investors.
Never just surprise your nurtured pool of investors with a new kind of deal to consider.
- Only raising money when you need it.
| If you are using other people’s money, you are in the fundraising business.
If you are in the fundraising business, you are raising funds every day. That doesn’t mean you are taking money daily from investors and putting it in your account. |
| But it does mean you should constantly focus on creating investor leads, talking to investors, and nurturing them. |
| You need to be generating interest and growing your platform. |
| Then, when you do have a deal, you have an educated, interested, self-selected pool of people who are interested in what you have to offer. |
| You’ll never regret the time and effort you put into this process.
For more information on my five-phase strategy and a course Fundraising For The Small Self-Storage Investor, click here. |
