ALTERNATIVE FUND RAISING METHOD

Developing the alternative entrepreneurship mind-set in fundraising is the principle and guidelines that will provide you with a better chance of effectively launching a new business from the scratch with little or no capital at the beginning. Some aspiring entrepreneurs don’t have the interest to start a business with borrowed money. They don’t search for loans or investors into their perceived business opportunity. They want to start all by themselves to maintain 100% shares of their businesses.

At the beginning of starting a new business from scratch, all you have at this point is only your written proposal or business plan, indicating the amount that you basically need to start the business. The first step to take in this alternative method is thus:-

Start with what you have.

At the out-set of looking to start a new business venture after all other means and methods have proven abortive, you start by taking stock of what you have at your disposal by looking inward into yourself.

1.    Skill: What can you do practically?

2.    Experience: What have you done in the past very well?

3.    Knowledge: What do you know?

4.    Tangible Resources: What do you neither have nor own as a property, and you do have access to?

It is recommended that you think very carefully about your answers to these questions. Go beyond what comes to mind immediately and think a little more deeply about what you have at your disposal. In this process, be sure to write down your responses to these questions.

Your written responses will create a collection of artifacts that can be combined to create something interesting, novel and valuable in establishing a new business.

Take into account what you have:

What you have need to be combined with what you know, for it to have real power. Take stock of the relationships you have with others, map out your net-work of locations. Consider how your connections could enable you to use what you have more effectively.

The alternative means of venture creation advocates, “stitching together partnerships to create new markets”. Relationship, particularly equity partnership, may drive the shape and trajectory of the new venture.

Invest what you can afford to lose:

There is a big difference in your mindset if you start with the perspective, either “I am investing this amount, or expect at least 30% return”, versus, I can afford to lose this much, therefore, I will put it into the business and see if I can make it work”.

If you have only put in what you can afford to lose, you will maintain flexibility in the business and minimize stress in managing it. But if you are only willing to invest when you expect that you can get a specific return, there is a strong chance that you may never take the leap and launch the business you always dreamed of owning.

=An example of this, is an entrepreneur who refuse to leave a well-paying job until he finds an opportunity that he predicts will pay more, versus one who decides to invest a small portion of her savings and two years of her life in a project that she believes is worth that amount of time and money-irrespective of whether it will pay than what she currently earn. She is trying out the alternative entrepreneurial mind-set.

Experiment and Adapt:

With this mind-set, flexibility and adaptability are a competitive advantage. You succeed not by becoming so fixated on a single goal or outcome but by being responsive to changes in the environment.

Existing firms typically take longer to adapt than new firms, because they have more incentives for things to remain the same and they have established routines and practices that re-enforce the status-quo.

New firms are not tied to the way things have always been done and thus entrepreneurs can benefit from shifts in consumer preferences, or shifts in technology or changing legislation by re-aligning their businesses to take advantage of such developments.

In the traditional approach of business planning, there is an explicit effort to avoid unpleasant surprises.

(The entrepreneurs with the alternative mind-set, in contrast has to stand ready to make do with what comes her way and learn to transform both positive and negative contingencies into useful components of a new opportunity).

          However, still in the process of starting a new business, when all the needful have been done for the purpose of raising seed funds, and there is no capital yet to start your dreamed business; with this alternative mind-set and the adaptation to circumstances on ground, they are yet different kinds of work and business the entrepreneur can start that will not require any capital or may require a very small capital for logistics. This takes us into businesses one can start, with little or no capital.

The alternative mind-set is to start something else or to do any other job for a period of time, just to raise the sum of money needed to set up the business of your dream. In starting an alternative business, you need to give yourself a time frame to do the available job, may be six month, or one year, or so. A time frame you think within yourself that you will be able to do the job and possibly raise the needed funds to start the business of your dream.

A Case Study

There was this French national I met in the Republic of Gabon, more than twenty years ago.

He was an expatriate worker, working in one of the petroleum exploration company, Shell Petroleum Company, precisely. Despite the facts that his colleague of same nationality where highly placed in the very company, this French national was in the swamp forest working alone side with us. When we asked him why is he in the forest, while his colleagues are in the offices and at highly placed positions.

His response:

There was no vacancy for me in this company. So I demanded for any available position, because I was in dare need of funds to start a business in my country, France. So I gave myself two years to work in this company, in two years I will be able to save the sum of money I need to start my own business in my country. All my salaries are sent into my account in France. It is only the allowances, as an expatriate that I make use of here, till I get back to my country.

The lessons we learn here are that:

We see someone who was ready to start his business, but was short of funds. He gave himself a time frame to do an odd job, so that he will be able to save enough money he needed to start his own business. He knew the amount of money he needed, and obviously he had a business plan that showed him the amount of money to start the proposed business.