Bespoke Investment Group co-founder Paul Hickey on how to stop the capital killers inside each of us.
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I recently had the opportunity to chat with a fantastic entrepreneur, Bespoke Investment Group and Bespoke Market Intel co-founder Paul Hickey, about his wealth of experience raising capital and making it work for him. In that process, Paul has also learned a lot about human emotions and their connection to business performance, which is why I want to share with you his story and advice — advice that will change the way you approach fundraising and emotional awareness altogether.
“I started my first company 25 years ago,» Hickey recalls. I threw $30,000 into it, and it started producing profits and positive cash flow the very first quarter we were in business. This continued for the next four years. Then, the internet emerged and crushed my business. I pivoted into a new, related industry and needed some outside capital for the first time. I had no idea how hard raising money would be”
Not long ago, Hickey took it upon himself to convene with several other entreprenuers and get their perspective on the fundraising process. «Four out of the five said they hated it,» he shares. «The fifth? They called it a nightmare.»
So what can we do to avoid falling into the majority that ultimately fails? Does the change lie in company image, strategy or finding substantial investors? Hickey claims to have solved this mystery, with the key being emotional awareness.
Related: 7 Essential Tips for an Effective Fundraising Strategy
How to Solve the Fundraising Crisis
In the midst of our conversation, Hickey asks whether «you are increasing or decreasing the chances of raising money when you are in a state of hate, frustration, anger or any other negative emotion.» His answer? «In any negative emotional state, you are decreasing your chances of raising money. If you are going to hate the experience, it’s the equivalent of picking up a hammer and hitting yourself in the head with it every morning. Most likely, the outcome will be the same: failure and a massive headache.”
But why all the pain? Why would we make things harder than they need to be? Hickey belives the fact of the matter is that most entrepreneurs are completely unaware that their negative emotions are killing their chances of raising money. Fortunately, there is a simple solution to this complex problem. When entrepreneurs consciously shift their emotions from a negative state to a positive state, they’ll witness a corresponding increase in their chances of raising money.
When you’re competing with a truckload of other entrepreneurs who are also trying to raise money from a very limited pool of investors, being in a positive emotional state gives carries over into every aspect of your efforts — efforts that the investors are studying to determine whether they want to place their trust and funds in your hands. Hopefully, they sense passion, hopefulness and dedication — not drudgery, frustration or hate.
Expectations Shape Our Reality
Let’s come back to why raising money feels like getting hit in the head with a hammer. Hickey recognizes where that pain and negative emotion comes from in one word: expectations. “Most entrepreneurs’s expectations of how much time and effort it takes are out of alignment with reality,» he explains. «The common answer I get when I ask entrepreneurs how much work and time it takes to raise money is about 10 hours of work per week for two-to-three months. In actuality, it’s about 20 hours a week for six months. When your expectations are that out of alignment, it’s like training for a 10K run, showing up to the starting line and being told to put on a wetsuit to swim 2.4 miles because you actually are in an Ironman triathlon race. What are the chances you will finish that race? Not high. What are the chances of you raising money when you work 10 hours a week for three months? About the same.”
When we set the wrong expectations, the overwhelming reality will lead to frustration, anger and all those other negative emotions, as well as the pain of unexpected difficulty and failure. If we realign our expectations and do our homework to ensure awareness and preparedness for what lies ahead in our fundraising efforts, we significantly reduce the negative emotions, pain and chances of failure that accompany them. Or in other words, we use the hammer as an effective tool, not a headache-inducing waste of time and effort.
Related: The Emotional Roller Coaster of Entrepreneurship
In the end, Hickey boils things down to two simple lessons: “First, become aware that your negative emotions are hurting you, and second, get your expectations in alignment with reality. Use awareness and proper expectations to minimize the pain and give you more energy to go out and raise the money to grow your business and fulfil your dreams.”