7 Secrets of Getting Money to Start

Author’s excerpt

Thank you for taking a look at this excerpt from my upcoming book, ”7 Secrets of Getting Money to Start.” This short book is presented in two sections.

  • The first section dispels some of the many misconceptions people have about business financing. This was often my first task with clients and it’s a great place for us to start, too
  • The second section will discuss innovative ways to get money to start your business
Read on to see what not to do when seeking startup money…

Can I get a grant to start a business?

That question is both a little but funny and a little bit sad..

It's funny, because why would anyone award a grant to a person to set up a business to make a profit?

It's sad, because scammers use this myth to rip off unsuspecting people mercilessly. I get 10 - 15 calls every year from shocked people who were ghosted by silver tongued thieves who promised their victims grants (or loans!) and then disappeared after receiving four and even five figure 'application fees.'

Sorry to put it this way, but suckers are still being born every minute, so just don't be one.

What about grants that aren’t ripoffs? I see news about real business grants in the press.

Some of you might remember a fast talking pitchman who promised a book full of grant opportunities for everyday people like, well, you! This perplexing peddler promised bales of unclaimed government money would be yours for the asking.

Consumer protection advocates claimed that most of the grants mentioned in these books were actually public assistance programs for which most people were not eligible. This author eventually admitted to having assembled his books from government guides to grants for specific populations or local jurisdictions.

Whether or not you remember this particular ploy, it serves as a cautionary tale. Are there grants available to help you start a business? In extremely rare, limited and specific circumstances... maybe.

Is it worth your time? Well, that depends on what you want to do with your time. Do you want to look for grants that might not exist or do you want to start a business?

In one common example of grants that aren't a ripoff, entrepreneurs are sometimes tempted by business competitions offered by local banking institutions. These events offer real grant money, usually awarded across a collection of multiple participants.

Participating banks enjoy good publicity and community engagement. These competitions often last for several months, with press releases, bank-sponsored pitch videos and bank-branded competitor profiles in abundance.

I’ve had a number of clients get swept up in the excitement of these offers, only to be disappointed by the outcome. This disappointment comes, in part, from failing to take advantage of the networking opportunities these events provide.

Who wins these contests?

Well, first and foremost, the bank. The lender gets priceless positive PR.

Who doesn’t win?

Generally, startups. This is for two very important reasons. First, few startups have the personal business network to garner the local support often required to be successful in these competitions. The second reason startups are seldom chosen is because startups sometimes fail — and who wants that in a PR campaign?

Time and time again, bank-sponsored grants are awarded to the same businesses a bank would welcome as a loan customer — well established, with a robust asset base, a large network and a proven market share.

Why? Because it’s a bank!

Are there exceptions to this grim prognostication? Of course. Question — do you want to put your energy into starting your business, or do you want to spend your time looking for exceptions to the rule?

The targeted opportunity grant

Another source of confusion and disappointment is the targeted opportunity grant. This is another example of legitimate organizations leaving startups feeling disappointed.

Community action organizations, large media companies or national suppliers promote targeted opportunity grants. “Targeted opportunity” means that a specific population is targeted for the opportunity — e.g., woman-owned business, senior citizen, re-entry or veteran entrepreneurs.

Like the bank-sponsored grants noted above, targeted opportunity grants have hundreds (or in the case of a national campaign, thousands) of applicants and a limited award pool.

When the winners are announced, it’s often discovered that the award is business training or some other non-cash result. Some of these grants are paid with a coupon for free services from the sponsoring vendor. Likely a valuable opportunity, but it's not startup money.

What about pitch fests?

Pitch fests are events that purport to put entrepreneurs in front of early stage investors looking for deals. In its purest form, a pitch fest is a gathering of like-minded individuals seeking mutual opportunity. If only…

Unfortunately, an entire industry has emerged focused on separating inexperienced startups from their money using pich fests. These operators use the promise of lucrative introductions for startups but sometimes the results are, again, disappointing.

You might have a different experience, but only if you are both extremely careful and extraordinarily lucky.

Avoid disappointment by using legitimate, but unlikely, sources of money as networking opportunities rather than sources of funds.

When the next bank competition, targeted opportunity or pitch fest comes around in your area, participate by attending the meetings and events.

You'll increase your chances of gaining access to all kinds of business resources. Enjoy the networking but apply only after very careful consideration.

It’s a jungle out there, and I don’t want you to waste your time on false promises or misunderstandings. Check my website for the release date of “7 Secrets of Getting Money to Start,” coming soon to Amazon Kindle!

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