How to raise money

In 2016, I started a cafe with no prior experience in less than a month.

Robin’s Cafe is still in San Francisco today. And though I no longer get discounts, we should meet for coffee there sometime!

I had to raise $50,000 to purchase the assets I needed to start the business – espresso machine, ovens, tables and chairs. It was the first time I ever raised capital and I had to raise the money in less than three weeks.

Over that manic 20 days, I pitched more than a hundred people – and learned a lot. These are the tactics I wish I’d known then.

Know your business

I had lived blocks from Robin’s Cafe for almost a decade. The neighborhood was long considered “the wrong side of the tracks,” but in 2016 it was about to undergo a transformation.

When I opened the cafe there was a parking lot across the street. Today that parking lot is a children’s playground. Startups were beginning to move into the neighborhood. 17th Street is now a thoroughfare for walking and biking traffic.

Starting the business amidst a growing neighborhood gave Robin’s Cafe the momentum that it needed to succeed. Though I had never worked in the restaurant industry before, I had a competitive edge in knowing what the neighborhood was about to become.

Homework

Know your business. That doesn’t mean that you are an expert on the entire industry (I certainly wasn’t!) but you do need a competitive advantage.

What’s yours? What is the thing that you see that other people don’t? As you prepare to ask for money, focus on that.

Have a clear vision

My vision was simple: create a place where dancers, parents, local employees, and neighbors could eat and meet.

It helped that I was a member of many of the different communities that I wanted to serve: I was a community member and dancer of the building owner ODC. I was friends with employees of tech companies in the neighborhood. And I was a long time resident of the neighborhood.

In order to sell someone on your idea, you have to know the specifics of the vision.

As a member of these different groups, I was better able to communicate that vision and serve those groups.

Homework

What’s your vision – the reason you are trying to raise money? Write it out as plainly as possible in two or three sentences.

Sell your idea

As I started to ask for money, I talked to people about the decade I’d lived in the neighborhood and how I’d seen it change.

I walked people across the street to Mission Bowling Club, which is now a staple in the neighborhood, and shared the story of meeting the owners years before inside their gutted, abandoned warehouse.

I helped people see my vision for what this cafe could ultimately become – if only they’d be willing to loan me the money to buy the equipment I needed.

In order to raise money, you have to first get buy-in for your idea, which means you have to sell your idea.

Homework

Why should someone be interested in your idea? What’s in it for them? Answer this question by listing out at least ten reasons why someone might be interested in the idea you are selling.

Share your emotions

I was determined to open Robin’s Cafe within a very narrow window of three weeks because I was running a conference for 150 people in the same building and needed to feed my attendees. The entire idea for the restaurant came because I had the conference coming up and wanted to get coffee and lunch for my participants.

During those three weeks, I lived on caffeine and five hours of sleep – and I didn’t try to hide my intensity from my prospective investors. Instead, I channeled that intensity into furor for what this business could grow into.

That excitement and optimism, combined with a sober assessment of the business opportunity, gave me the conviction to pitch the restaurant.

Homework

Share your emotions with your prospective funders – your excitement, optimism, and hope for what you are selling.

What are you excited and hopeful about? Tap into their eagerness to be a part of something bigger.

Show them, and don’t just tell them

At Robin’s Cafe, I was able to walk people through the neighborhood and give them a taste of what the cafe could be – if only they would help with funding!

I shared my vision for what the cafe could be: a gathering space for dancers, for parents of kids, local employees and neighborhood residents. I walked my prospective funders through my landlord’s building. (Fortunately, the landlord owns two very beautiful buildings!)

I made them samples of our menu and poured them free wine (conveniently ignoring the fact that I didn’t yet have a liquor license).

Show your funders what the opportunity looks like. Help them to see the future that they are going to help you create.

Homework

Show your prospective funders the things they will experience. Give them the ability to put their hands on a product. Allow them to experience what you are selling.

Tailor your story to the person

Fundraising is highly personal. Everyone, whether a professional investor or a personal friend, invests for their own reasons.

I showed off cafe spaces available for meetings and co-working to a friend who took meetings with clients throughout San Francisco, and mentioned that we could also cater their company’s lunches.

There is an art gallery attached to Robin’s Cafe, which I showcased to a local artist who was considering funding the business.

Homework

Learn why each prospective funder is most likely to invest before you pitch them. The more discovery you do, the more likely you are to succeed.

In the end, I successfully raised $50,000 from five people in under 20 days and successfully ran the cafe for three years before selling it.

I attribute that successful fundraise to three things:luck, determination and the decade of preparation I’d inadvertently put in while living and working in the neighborhood.

I don’t know how to control luck, but incredibly hard work and a lot of research can make the impossible happen.

Until next time,
Robin

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