Archive for Credibility Building

Private Lenders are impressed with degrees--especially post-graduate degrees.  It is one measure of your ability to overcome challenges.  However, there are many private investors who are self-made, and became fabulously wealthy without the benefit of a college education.

In the end it is what you can achieve that makes the difference with a Private Investor.  So, starting a successful business, succeeding in your corporate job(s), and surrounding yourself with an experienced top notch team.

See our "Building Credibility" webinar under the events tab--available to all members

Hey, nobody's perfect.  In fact, being anxious about "being perfect" will do more to harm your presentation than anything else.  However, you do need to be prepared as possible.  This means have you have tested and revised your presentation.  And you have practiced your presentation until your are comfortable and confident with what you are going to say and how you are going to say it.  Also, you have taken care of arranging all the details of your meeting.

I have given a 2-day training a making a presentation to private lenders that is available FREE to all Private Lending Insider Members that covers all these details, and much, much more.

To Join, go to the home page and click the orange Membership Button.

When you are in the process of networking -- that is meeting people and mutually evaluating whether you and they would be a good match for an investment opportunity, specific terms need not come up.  In fact, your first goal should be to get someone  to like, respect and trust you, before mentioning anything about an investment.  Secondly, when you are promoting your investment opportunity to a private investor, your goal is to paint a picture of a highly profitable, low risk investment.

Once the investor expresses some interest in the investment, then you can arrange a separate meeting where you can discuss the details, including specific terms.

You can find out more details by reviewing the training sessions listed in the "Events" tab.

Most private lending gurus will tell you to prepare an elevator speech--a 30-60 verbal advertisement about your investment opportunity.  The goal is the attract a person's interest in your deal.

However, most people respond negatively to unsolicited advertising.  If you want to raise private money, you first need to Build Relationships with potential private lenders.  The goal is to get them to like you, respect you and trust you.  Of course, you do want them to be interested in your opportunity, but the kind of "in your face" approach that is often recommended, sounds cool but is usually a turn off. 

First demonstrate that you are interested in them, and then draw them into your opportunity.

Private Lenders as with most other investors, invest their money in businesses.  Having a business entity builds credibility with a private investor and provides other benefits such as liability protection, tax advantages, etc.  So, before one begins raising provide money for any kind of investment, it is highly recommended you incorporate in the state in which your business is located, so that you are a legally recognized corporate entity: Corporation, LLC, Partnership... A sole proprietor or DBA (doing business as), marks you as an amateur, and an investment risk.

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An intensive personal 8-week training
to bring you to getting the check

Here's How to Enroll in the Private Money Mastery Program

The Private Money Mastery Program is a short-term intensive 8-week training the will give You the entrepreneur, the “real life” skills, ability and every Resource you need to go out and find those high-net worth individuals who are interested in investing in your business and then actually convince them to write a check.

The system is based on Professor Richard Odessey’s GRAD formula (Get Ready, Attract, Deliver).  Richard is both a longtime entrepreneur and a Private Investor himself.   You will learn directly from Richard and the CEO of his Angel Investor Group.

And you will get personalized instruction that you can apply to your very own business and go out and raise the capital you need to succeed.

Here is the knowledge and skills you will develop:

I. Get Ready

When you meet with those Angel Investors (or anyone else who might invest), you’ll want to be totally prepared.  Imagine the confidence you’ll have knowing you have a great plan, a great investment and that you can easily respond to anything an investor throws at you.

So, well start off by helping you:

  • create your credibility kit including an impressive bio, business summary, and testimonials
  • create your board of Advisors and Strategic Team to bolster your credibility and appeal to investors
  • For real estate investors we’ll show you how to put together your property  package
  • Create your offer that will stimulate the greed glands of your investors without giving away the farm.
  • Make sure you have the proper “investor-friendly” entity structure
  • Create your 1 page investor profile (sophisticated investors with big bucks will expect this).
  • Create a timeline so you can accomplish your goads in weeks, not months or years

II. Attract

In the “Attract” phase you will develop the tools and resources to find the investors that are right for your business and learn how to get them interested in investing.

You will:

  • Work with your list of contacts and learn how to expand
  • Get an in depth understanding of investor psychology and learn what buttons to push
  • Develop an “elevator pitch” that will catch the attention of investors
  • Learn how “Get the Meeting”
  • Develop master networking skills.

III. Deliver

This is the “show me the money” part of the formula.  It consists of:

  • Developing a Powerful, Concise and Effective powerpoint presentation
  • Recording it.
  • Having your presentation professionally critiqued
  • And practice, practice, practice
  • Going over questions you will be asked and how to answer them.
  • How to ask for the money

If you agree to put in the work, we can show you how to master all these skills, and go out and get the money.

Private Money Mastery is an 8 week intense program.   You will be mentored by 2 master instructors: an experienced entrepreneur/and investor, and the CEO of an Angel Investor Group.

This is a totally unique program devoted to skill mastery and is only for entrepreneurs willing to do whatever it takes to succeed.

Please Fill out and Submit the Application below.
Richard will contact you to set up your first meeting.


Tell Us About Yourself
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private money lendersWant private money? Well, as you might have figured out, you can’t just walk up to a potential private lender, tell him or her about your “deal”, and expect them to write a check. No way. If you want to be successful in raising private capital for real estate, you have to learn how to “attract” private investors to you.

So what’s the secret? Or to paraphrase a famous movie title: “What do Private Lenders Want?” The short answer is: put yourself in the private lender’s shoes, and think about what you would want before you invested your children’s inheritance is some real estate deal.

Now, what I’m about to tell you may shock you. It’s not the “easy-no effort” seminar version that gets you all excited, but won’t put a nickel in your pocket. These are answers based on the experience of raising “real money” from “real private investors”.

First, know this. Your private investors are walking around with an invisible antenna over their heads that is tuned to only 1 station: WIIFM or “What’s In It For Me?” Unless you can explain that clearly, quickly and concisely, you’re out. Private lenders have no patience for people who beat around the bush and waste their time.

Second, as a sophisticated private investor, I know that not all deals are good deals, and not all good deals (e.g. good for you) are good for me. So, don’t give me a canned elevator speech, and expect me to be excited and whip out my checkbook. First, “show me the money.”

Third, your private lender is as skeptical of the real estate market as the general public and doesn’t necessarily think it’s a “great opportunity”. How is your approach going to overcome those concerns and in fact benefit from them?

Next, anybody who has become wealthy enough to have capital to invest, did not get there by taking excessive risk with their money. The reason why lottery winners generally end up poor again is because they never learned this principle.

Or as Will Rogers once said: “When it comes to investing, I've always been more concerned with the return of my money than the return on my money."

If you want private money, you need to explain to the investor, how he is protected from losing his principal and how he is going to get his money back (ROI = Return OF Investment).

And you must address the question of risk. Unlike most people, private lenders have fairly low risk tolerance. If the risk level in the deal exceeds their risk tolerance, no offer of a return is going to convince them to place their capital with you.

And the Final and probably the most important consideration for the Private Investor is: “YOU”.
Angel investors have a saying, “Bet on the Jockey, not the horse”.

Think about it. Would you invest your money with someone you didn’t know or respect, regardless of how great the deal was? I don’t think so.

Are you a person of high integrity, who does what she says she’ll do? Do you have the experience, knowledge and expertise and the team to see this deal through to a successful conclusion? And Trust me: No private lender is going to entrust you with their capital, unless these questions are answered and demonstrated to their satisfaction.

raising private capital from private investorsWhen you talk to an investor about your business and your offering, he or she is usually listening with an ear of how to eliminate you from consideration. Unfair yes, but true.

After all, the investor is risking his or her children's inheritance on your business, and they are very sensitive to any percieved "danger" signs.

Here are the 10 most popular "danger" signs.  Say anyone of these things and you will very likely eliminate yourself from any possibility of an investment.

1. "I have no competition".  or anything indicating that you are too casual about the competition.  After all, the only way there'd be no competition is if nobody wanted your product or service.   The competition may not address the needs of your customer as well, or as economically, and that's what you should address.

2. "We will capture a high percent of the market".  It is not realistic to expect your start up business to capture more than a few percent of the market (and even achieving that goal is a challenge). 

3. "We can achieve our exit strategy with your investment alone."  All start up companies need more than one round of financing. In fact that should be part of your business plan.  You should only be asking for enough capital to achieve the next milestone that will increase your valuation.  Otherwise you risk giving up to much of your company.

4. A Business or Growth Plan that is Unrealistic or not well-thought out.  You're going to have a difficult time convincing an investor of the viability and worthiness of investing in you if you use unproven revenue models, distribution schemes, or marketing plans.

5. Not Describing your Product or Service Concisely and Clearly.  If the investor can't understand what you are doing, he or she is not going to invest.   And even if they have to struggle to understand your concepts, they will be concerned about the clarity of your thinking.

6. Ridiculously high valuations.  For example, if you are starting a company with just an idea and some market research, to ask for $100,000 for a 5% share of your company, you are valuing the company a $2 Million.  To an investor this indicates you are unrealistic and you may be a difficult person to deal with.  You will not get a chance to negotiate this down, because your number is out of the ball park.

7. "I am going to use part of the capital to pay off past business or personal debt."  The investor wants their funds going toward growing the company, not bailing you out of past mistakes.

8. "I'm only willing to give up 5% of my company"  At an early stage to be unwilling to give up reasonable amount of ownership for a large investment that is essential to achieving your milestones also pegs you as naive, or unrealistic, and gives the investor the impression you may be difficult to deal with.  Actually, if you think about it, this is just another way of saying that you need to have realistic valuations to interest investors.

9. Complex Ownership or Stock Structure.  When you are starting out, do not make promises to early investors for small investments that is going to complicate your ability to raise large investments.  For example, notes convertible to large % of ownership, critical patents owned all in part by 3rd parties, etc. 

10. Misrepresentation.  If an investor even gets a hint that you are not being completely honest and open about all aspects of your business, it's Game Over!  You need to completely disclose all your skeletions including bankruptcy, previous business failures, legal disputes, etc.  Failure to do so, can constitute fraud and get you in financial and legal trouble if you go ahead with the investment.  When in doubt you should consult a securities attorney.

private money bad creditI just got this email: Will bad credit hinder me from getting a private investor?
Sincerely,
Tammy

Well, Tammy the answer is: Your credit has absolutely nothing to do with raising money from a private investor.

There are 2 reasons:

1) The private investors cares about the 5 key secrets:
-What's in it for him (or her)? - that is the return on investment
-Return OF Investment - the soundness of your exit strategy
-Risk - how well have you structured the investment to minimize the financial risk to the investor
-Credibility - Are you a company? Does your company have experience, advisors and professionals that can make sound decisions.
-Trust - do you have a relationship with the investor. Have you built up his trust that you can do what you say?

2) The second reason is that the investment should not be about YOU. It's about your company. After all, if you invest by buying shares of IBM or General Electric, do you know the credit score of the CEO? Heck, do you even know who the CEO is? Does it matter? No, because you're investing a company with a track record and resources to carry out it's mission and achieve its goals.

You should present your investment the same way. Listen to some of the interviews with private lenders, and our articles on structuring the financing for your business and creating an impressive business plan.

When you'd like to go to the next level, you may want to consider attending our Advanced Private Lending Summit where we work with you 1 on 1 to create your entire private lending program including your own personalized presentation to private lenders.

EVERYONE who has attended has loved it, and are now busy raising money from private individuals. We hold our Summit 2 times a year here in Atlanta.

Check your Members' Area for the schedule AND get a Members Discount on the Tuition.

Here's a comment from just one of our last attendees:

"..Save your money as quickly as possible [so you can go to this].

I was at that seminar and now will be giving my presentation to a few MDs this week.

Having the ability to practice it in front of the group and hear Richard's insightful critique sure did help. More to follow, after the presentation."


- Vivian Hooton vivianhooton@gmail.com