8. Raising Capital
The wisdom of Socrates has lived for longer than 2,000 years. His teachings influenced my thinking and approach to problems. To figure out next steps in the development of my career, I turned to his question-based approach to learning. The more questions I asked, the more truth I found in his saying, “The one thing I know is that I know nothing.”
By the spring of 2014, I’d been free from the Bureau of Prisons for eight months. The experience of creating the Straight-A Guide and striving to bring the product to market taught many lessons. More than anything, I learned that I needed help. In order to build a truly sustainable business, I’d need to inspire a team of qualified professionals who could accelerate sustainable growth.
I did some simple back-of-the-envelope math. Attracting candidates who could execute a plan would require sufficient capital. To start, the organization I envisioned would have to pay livable wages. We’d need at least $300,000 per year to build a team of five people with appropriate skills. In addition to those resources, we’d need resources to pay for office space and equipment, travel, marketing, advertising, and web development. Then, we’d need resources to fund an independent research project to evaluate the effectiveness of the Straight-A Guide. All in, I anticipated that we would need between $600,000 and $1 million per year to fund a sustainable operation. Further, we likely would need three years worth of funding before we would become a fully validated, evidenced-based program. Simply put, to bring this dream to life, I anticipated that we would need between $2.5 and $3 million of venture funding.
As a convicted felon who had only recently been released from 26 years in prison, I anticipated significant challenges in raising $3 million. Yet raising funding of some sort would be necessary if I were going to succeed in building a business. I couldn’t work for free and I couldn’t expect anyone to join the team I envisioned if I couldn’t offer livable wages. Working to change the world would be great, but people needed to eat, too.
Before picking up the phone and trying to raise money, I used the same strategy that I taught through the Straight-A Guide. That strategy of identifying values, setting goals, and articulating a message helped me conquer 26 years in prison and I was convinced it would help me chart the next course of my journey in society.
To start, I thought of my avatars—the prospective investors. What questions would they want me to answer? If I could understand their motivations for investing, I would advance my prospects for success.
(Discuss crabs in bucket, importance of building credit…)