Your map to money in 2023

Looking for growth capital? Here’s where to find it

This weekend, I re-learned an important life lesson watching my son’s hockey team take second place in the state championship.

When the stakes are high and the pressure is on, don’t be surprised when the other team uses “unsportsmanlike” tactics to win.

Sure, you can complain to the refs, or even complain about the refs… but if you’re competing in any tournament for the big prizes, you’ll always have the Cobra Kai’s of the world who don’t care about playing a clean game.

That’s why you have to understand how the games are played, how your opponents are playing the game, and how you can win no matter what rules they break or what penalties the refs do or don’t call.

Good news. If you’ve been up against a well-funded, probably venture-backed, bully in your space who you’ve struggled to beat… 2023 could be the year you finally rise to the top.

But if you want to make big moves this year and take down Goliath, you’re gonna need more than just a slingshot and a couple rocks. And you definitely can’t complain to the “refs.”

The way to unlock your business is getting access to LOTS of affordably priced capital — whenever you need it.

How much capital are you looking to raise in Q2?

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Nothing wrong with being the underdog competitor – but where are you going to come up with the capital to take down your arch-nemesis?

That’s exactly what we’re going to talk about in today’s issue of Pitch Anything Playbook.

-Oren

P.S. I’m so proud of Asher and the great hockey he played.

He was heads-up, focused, and made great passes to his teammates.

All season he’s been a fantastic player. So much that his coach said to me “I hope Asher will play on my team next year. He belongs on the A-team.”

Asher and his hockey coach.

It was a great year playing hockey. He evolved as a player and a person, and learned any lessons, and that in our family, We don’t back down from bullies.

It was a lot of pressure. Get up, play hockey, rest, eat, go to the next game. Its not a vacation. It’s a sport.

Business is the same way. And if you’d like to upgrade your Company to the A-team and take down some big bullies on the way to your own championship, I’d like to invite you to join my growing West Coast Finance ecosystem.

Applications for our April cohort are due no later than Friday @ 5pm PST. We are accepting 12 companies for our April group and 8 spots are already taken.

In the Era of Easy money, there were tons of tourist investors like Tiger 21 offering cheap capital and easy access to the ‘money country club.’

But today? Institutional capital is all but shut down unless you’re an experienced insider.

What’s changed? Charismatic tech wunderkids are OUT.

Adults with spreadsheets, accounting and math are IN And entire industries are about to be turned upside down during the coming shakeout and consolidation.

If you’re a medium sized businesses , 2023 represents a crossroad in your business's survival. It’s Acquire or Be Acquired.

You have two realistic choices right now.

  1. Prepare to Sell: Start cutting costs, focus on efficiency, and hope you can survive the winter with what you can save up or sell the asset off.

  2. Build and Scale: Take on investor capital, go after a big market, and become the winner on the other side of the storm.

But the thing you CANT do is try to hang out in the middle market competing for 8th place via organic-growth knife-fights with your competition.

The only way you’re going to become a category-dominating company is to take on investor capital, move fast, and capture market share while the competition is stumbling.

If you’re still reading this, I’m assuming that’s because you’re looking to scale up and go big.

But in order to go head to head with the King Kong of your industry, you need money.

Here’s the problem: That money comes at a price you might not be willing to pay…

The soul of your company and the end of all things fun in your life.

You have a vision, culture, and goal for your company that you’ve nurtured for years. Once you bring in outside investors who seek to influence the very things that make your business successful, you introduce massive risk.

When you rapidly change the vision, culture, or goals of the company, you introduce potential opportunity… but also massive uncertainty and risk.

That’s what’s at stake if you go out and raise capital, but don’t understand how to protect what’s important to your growth.

Sure, you might be able to look in the mirror after giving up 30-50% of your company to some growth fund …

But you already know, taking money is usually a deal with the DEVIL.

Because you’re not just giving up equity….

….. you’re giving up control. 

But the way investors take control doesn’t look like a normal business deal you’re used to. It’s buried there in the security documents.

You could probably read the control clause 20 times and not even recognize it for what it is.

For example: I’m doing a joint venture deal right now that has some pretty standard control features you’d expect to see: Observation rights, reporting requirements, spending limits, voting privileges… all of which is an effort to prevent fraud and make sure everyone gets paid.

Here’s what Shadow Control looks like: A MINORITY shareholder who can exert MAJORITY level control via…

  • Preferred Shares

  • Liquidation Preferences

  • Board Seats

  • Termination of Management

  • A Redemption Mechanism (or “Put”)

  • Pro Rata Rights

  • Warrants and Options

  • Capital Calls

  • Growth Targets

Your entrepreneurial instincts don’t work here.

In fact, they’re used against you. And anything that comes out of your mouth in any meeting will be used to knock down price and increase control.

Everything that makes you, well … “you,” is no longer valid in this arena.

In the money game, after one bad contract …

No one is coming to save you. Only you can save your company, your family, and yourself.

You need something different than what you’ve been led to believe is necessary to win.

You believe in your heart of hearts that if you just had more money, that’s all you need.

I know that you might sincerely believe that “if I only had access to working capital money, this thing would take off and I’d be rich!”

But you can’t go “raise money” from a nebulous blob of anonymous capital. You raise money from people who manage capital.

And they aren’t interested in your company.

Oh sure, they might like you and what you do.

But they are only interested in buying a financial product: your company’s stock

And now you have to ask yourself, is there any demand out there for my company’s stock?

No. there is not.

So how do you solve that?

How do you create a demand market for something that no one wants – your company equity?

First… you need to know WHERE money is aggregated into pools of Capital…

Second… you need to understand what that capital wants (i.e. the risk/reward profile).

Third… you need to be able to run a specific “Insider” capital raising process to get interested investors to come to you and offer favorable terms.

Upcoming Events @ West Coast Finance

Interested in becoming a member of West Coast Finance – my entrepreneurial ecosystem of business builders working together to launch enduring American companies?

If so, we have membership opportunities for:

  • Early Stage Growth Companies: Must be a US-based operating company raising capital from US-based investors under US-based securities laws. We don’t typically work with “pre-seed” companies with no product and no revenue.

  • Early Stage Investors: If you have allocation for early-stage growth companies (minimum $2,500 position size) and would like access to our ecosystem of companies, we’ve got a special community for retail investors, high net worth individuals, and family offices.

  • Financial Sponsors: If you have portfolio companies you are working with on their capital-raising syndication program, we have great options for sponsors interested in running a retail equity + institutional debt side by side.

  • Professional Service Providers: For all the consultants who help their clients raise capital, we’ve got tons of tools and training programs designed for anyone in an advisory role.

It’s free to attend the session, but membership is by application only. We like to welcome new members in cohorts of 12 people in order to provide all our new applicants with the best chance of succeeding in their capital raise.

This week is our last week to sign up for the April cohort. We have 8 spots filled.

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