Saturday, December 5, 2015

There's No "Cash In A Flash" - Don't Be Desperate!

In the search for capital and financing, desperation and a lack of a realistic time frame, some sustenance funds and a healthy perspective are absolutely poisonous!

Perhaps the worst mistake that entrepreneurs, project leaders, innovators and executives make is when they approach financial sources or established management consultancies with desperate demands for "cash immediately," accompanied by such desperate pleadings as "we need this money yesterday!" or "we'll lose this opportunity if we don't receive funds within x period of time!"

Sources of capital as well as management consultancies (at least the responsible ones) are not in business to bail out companies and clients. They are in business to help solve business problems within an appropriate time frame, and to help clients achieve realistic and reasonable objectives. The more desperate that you appear, the less likely it is that you will attract either quality consulting or an infusion of capital.

Don't forget that providers of capital and consultancies are in business to make profits and to generate fee income. They do not generally want to salvage other people's wrecks, if the situation requires lightning speed, desperate need, cash-in-a-flash, and there is insufficient capital available to conduct a due diligence review and to properly process a request for a capitalist intervention.

If a capital source or a consultancy is overly responsive to your desperate entreaties for money in a hurry, they are likely not seriously interested; setting you up for a "fee gouge"; or just simply incompetent. Any firm which does not require some serious due diligence before it will entertain your request is engaging in a questionable practice.

If you are searching for capital, be prepared to endure for a reasonable due diligence period, be prepared to pay some fees for professional engagement and/or due diligence, and never speak of desperation or pressure. Imposing your desperation or pressure on a capital source or a consultancy will generally cause them to turn you away.

Ironically, and lamentably, getting capitalized (especially when being represented by a qualified management consultancy as your advocate and negotiator) requires that you have some of your own capital to sustain your business and to pay fees, and that you have adequate time to allow for the capitalization process.

Thank you, as always, for reading me.

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