4 lessons from a failed fund-raising exercise by a tech entrepreneur

“It is my wish for you to recognise that if I can become the luckiest person in the world, then with a little bit of work, and yes some luck, you can give me a run for my money for the title. I won’t relinquish it easily, but you can be certain I will love the competition,” says American business man and Dallas Mavericks owner Mark Cuban.

He makes the interesting remarks in his book ‘How to Win at the Sport of Business If I Can Do It, You Can Do It’.

Inspired by Cuban’s “every no gets me closer to a yes ” – Phehello Mofokeng’s article might just be what the entrepreneur needs to get a boost. Editor

By Phehello Mofokeng

Raising funds for your start-up business is a difficult task. Raising funds from a small business incubator or accelerator is even harder.

There are loops and hoops and these need some careful consideration. Admittedly, while the incubator and accelerator process is hard, it is still far better than going to banks or private commercial investors.

There are a few things that I think are important when one approaches incubators for a business loan, a mortgage or seed capital. I recently went to one of these capital raising lotteries in Joburg, but my business proposal was rejected.

I do not think my business idea was not good. I think my idea was rejected for factors that had nothing to do with the business itself.

Nonetheless incubator lotteries and fundraising activities can be very useful. They serve a specific function and by and large, they can be very helpful.

10 years from now, we could have mega companies that are a direct beneficiary of incubators and accelerators.

But they are not free from fault and mistakes. With the benefit of hindsight and my personal experience, I have learned a few lessons that you might benefit from.

Speak their language

Listen more than you speak. If you are invited for an interview, presentation or anything of the sort, listen twice as much as you speak.

While you have to show that you know your business, you also need to listen – especially to things unsaid. Listen between the lines.

Sometimes when people speak, they say more by what they do not say than what they actually say.

People you are presenting to could be the same – their choice of words and what they do not say, could be just as important as what they say.

For example, if you are asked: “What do you sell?” – you are not necessarily being asked for a high-level pitch. They could simply be asking for a physical, tangible product that you sell (even if you sell a service).

So it is important to listen, and then answer the question as precisely as possible.

For example, if you are asked: “How much are you asking for?” … do not respond by asking “how much are you willing to give me!”. Rather give a precise and specific number.

Confidence v arrogance

Keep your arrogance in check! You might think your idea is the next Facebook, but the funder does not care at this point.

In presenting your idea, try not to be over-zealous and over-confident.

Incubators generally have a “big brother” attitude. They might think that you need “babying” and they might assume you do not know much about business – if you did not, you would not be asking to be incubated in the first place.

When speaking about your business, ensure that you are confident. It must never become arrogance. It is a very fine line, but one that all young business people have to learn. Be polite, courteous and maintain eye contact. Do your best not to show emotion.

Answer even the most annoying question

Truth be told, some of these funders are not the brightest buttons, but they have the money (or at least access to it).

No matter what you may think of the people you are presenting to, or you are seeking funding from, you have to politely indulge them.

Some of them will ask the most annoying and brain-numbing questions. Some of them will take you on a wild rollercoaster ride of hypothetical, rhetorical questions that will answer nothing but their own arrogance. Find it in yourself to indulge them.

For example, if one of them asks you: “Do you know chaos theory or black swan events?” or if they say “answer me like I am a two-year old … ” – just find it in yourself to engage these questions, even though I do not know why I would speak to a two-year old in a business meeting in the first place.

Dress well

When I am dressed well, I feel confident. And asking for someone’s money is an exercise in testing your confidence.

Someone said to me, by dressing well, you do not only respect yourself, but you also respect the next person.

It is a business meeting essentially, so do not go there looking like a taxi driver (nothing wrong with taxi drivers), but put an effort in looking like a business person.

Rejection is not really a bad thing

When you are rejected – because many are invited but only a few are chosen – do not take rejection as an indication of the strength of your business. If you are convinced that you have a good business, do not take rejection by an incubator as the final stroke to break your back.

Take the lessons, recollect your pride from the floor and march on. The owner of www.alibaba.com was rejected, fired and refused by all and sundry before he became a billionaire. Fact is that accelerators and incubators are also just taking a chance on you. They do not have a crystal ball that shows them that your business will be as successful as they want.

Also, look at it this way – they might just not be the right match for you. It is like being rejected by a girl of your dreams. Sometimes your dreams might frighten her and she is just not ready for a big dreamer like you.

Accelerators and incubators are exactly the same. While they hold the cash, you hold the dream, the idea, the business. And some of us got to where we are, without them.

Someone said, you can realise your dreams and expand your business by “standing on shoulders of giants.”

But what if the giant is blind to your dreams?