Stop looking for funds. Start looking for trust.

Image credit: Joris Louwes

Raising money when you are a startup is for most people a time consuming, soul-destroying, and mostly futile exercise.

That was certainly my experience the first time, and judging by the amount of requests for help I get in this area, I’m not the only one.

There is plenty of advice out there, but let me share with you what worked for me when I stopped “knocking on doors” and started thinking about the process.

Trust, not funds

In my experience, knocking on doors and approaching angels and venture capitalists (VCs) is altogether the wrong approach. For a start it is what everyone else is doing, which means you are just one of many. Never a good place to be.

There are, of course, lots of moving parts between you having your genius idea and the money actually being deposited into the bank. You need to have a good business idea, a good team, a fair amount of luck, AND the investor needs to trust you.

Fundamentally, you can have all of the other things going for you, but if the investor doesn’t trust you, that money is staying in their bank account, not yours.

Conversely, if you do have a group of people that trusts you, how much easier do you think it would be to raise money? Would people willingly invest and tell their peers about the opportunity? Of course, because they trust you to deliver.

The trick then, in my experience, is not to go looking for funding, but to go looking for trust.

How do you build trust? The quickest and easiest way is to leverage on the trust people already have for others (there is a reason brands pay a fortune for celebrity endorsements!).

The equivalent for your business is to sign up with some industry superstars:

Step 1

Identify half a dozen people that are respected in their industry (it doesn’t even have to be your industry). It might be the CEO of a company, a successful entrepreneur or it could just be a director of a mid or large sized company. You are looking for people that would be recognised in their industry, but who are not so famous that they are already receiving lots of requests like this.

Step 2

Conclusion