Why I Needed Financing for My Business
Gregor Watson, managing partner at McKinley Partners, speaks on the tips he’s learned from raising money for his first business at 23 years of age to his current fund of over $50 million at McKinley Partners.
I have done it all when it comes to raising money, from the can’t-sleep-at-night credit card to friends and family to help raise money. Now we’re on our current fund which is now has over $50 million under management. There are ups and downs to both kinds of raises.
What Choices I Evaluated, What I Chose to Do, and Why
A solid business plan provides an insurance policy. Raising money from others is not easy but it can act as a sounding-board insurance policy and will ensure you have a sound business plan.
Ask the right questions: It is easy to put things on your credit card and dip into your personal savings to chase your dreams, however, you may find yourself not answering or asking all the hard questions an outside investor will ask you. My first fundraising was at the age of 23 for a restaurant chain for which I used friends and family credit cards and a small business loan from Wells Fargo (back when you could get a loan). While it went well and I was able to raise the money quickly there were a lot of holes in my business plan that would have been filled if I would have approached professional investors.
Lessons Learned
- Learning from your mistakes: Learning from my missteps from my first fund set me up to have the ability to raise more money more efficiently on our current fund. The residential market has stabilized in select markets throughout California and there is very little lot inventory in the best locations for builders two to three years out. We think there's a great opportunity to provide that inventory to builders and generate compelling returns to our investors. I learned from years of experience from his listed tried and true tips from above.
