By Stefan Aarnio
Freedomway.ca

Remember: Please share this article if you found it helpful!

Anyone who has ever become successful in reaching their dreams has always had a series or roadblocks to overcome.

Whether you are a Real Estate investor who has dreams of building an empire, a Entrepreneur with the next great idea or an Artist with the next great vision, we all have a series of challenges to face before we can become successful.

One common challenge that everyone has to face when chasing our dreams is that somewhere along the way, we require capital.

This is true for absolutely everyone. Whether you are the Real Estate investor requiring capital for buildings, the Entrepreneur requiring capital for a venture or the Artist requiring capital for an Art-form. The requirement is universal and every business/successful person requires funding at some point in his or her path to success.

Unfortunately for many people, raising capital is a "black box of voodoo" that many do not understand. Some of us are held back by limiting beliefs that "we do not deserve" to have capital or that we need to be born with it to be successful.

Nothing could be further from the truth.

Raising capital is a science and an art form. It obeys the law of certainty much like everything else in this world.

If certain things are done in certain ways, certain results are certain to occur.

With that being said, here are 5 Secrets to Raising Capital shared with me by the very-successful capital-raiser JT Foxx:

1. Dress to impress: We only have one chance at making a first impression. The timeframe for establishing a good impression is a very short window between 3 and 30 seconds. As social animals, we are constantly looking for reasons NOT to do business with other people and we will scrutinize every minor detail to disqualify a newcomer. Some key details for dress are: the quality of suit, polished shoes, quality of business cards. Anyone who is idealistic enough to think that these things don't count is delusional. Even legends like Steve Jobs, Richard Branson and Hugh Hefner had to wear suits early in their careers. Dressing to impress is an easy way to ensure success.
2. Pay attention to your branding: Effective branding is extremely important for anyone who wants to raise capital. However, branding is so much more than just a name, a colour and a logo. Branding is a feeling and an emotion surrounded by you and your company. What feeling does an audience get from you? Some easy ways to find out if you have effective branding or not are; Do you show up effectively in Google? Do you have pictures of yourself with successful people? Branding is what separates the top from the bottom in any business and it ensures a potential investor that you are not a fly by night operation.
3. Know your numbers and be conservative: If in doubt, always be conservative. The worst mistake so many people make is that we try make our deal look better than it really is. A savvy investor will always poke holes in your strategy and call you on a plan that is too optimistic. If you appear to be misrepresenting something then you will scare away your investor and their money. Provide a "best case", "realistic case", "worst case" and "nightmare case" scenario. If your investor is ok with the "nightmare case", then you know that you have a deal.
4. Back end is more important than the front end: Congratulations! You raised the Capital! Now what...? In a perfect world, raising the Capital is easy. What is much more important, however, is how you manage the "back end" of the deal. How good are you at "taking care" of the investor's money? Savvy investors are very hesitant to part with their money and you need to show them some accurate monthly reports with precise information. One of the worst things you can say to an investor is "I run the business and I do my own books." Investors want to see audited financials by a certified account. If you can provide this information you show that you are a professional, understand what they need to feel secure and have built a competent team.
5. Make it about more than the numbers: Relationships are always the most important thing in business. When you pitch a deal or yourself based on the numbers, you are selling yourself short. If you are placing all of your value on the numbers alone, you are in big trouble. Don't be known as "the 12% guy", because later when the "13% guy" comes along, you will be finished. Instead, focus your presentation on your relationships, philosophy and results. Sell the vision of the big picture to your investors and have strong, realistic numbers. If you can provide all of the above, then investors will be calling you looking for a good place to put their money.

Raising capital is a skill that very few people have mastered. It's a skill that revolves around sales, marketing, branding, relationships and understanding the numbers. If you can focus on the 5 fundamentals above, then raising the capital required to build your dream will always be easily found.

Thanks for reading,
Stefan Aarnio
Freedomway.ca

P.S. Please share this article if you found it helpful!

By Stefan Aarnio
Freedomway.ca

Remember: Share this article if you found it useful!

Today I had lunch with Troy MacDonald, the leader of the local Winnipeg Property Investor's Network and we were talking about mindset.

Mindset is perhaps, one of the most important assets in business or entrepreneurship.

Most people think that money is holding them back from reaching their dreams, but in fact, money does not exist. The only thing holding them back from reaching their dreams is in fact mindset.

When I was 22 years old I made the choice to go into real estate investing. I had literally no money and no experience... all I had was passion, a gut feeling that real estate was where I wanted to go and a very strong reason why I wanted to pursue real estate.

All I had was guts and passion. The little money I did earn as a guitar teacher was invested primarily in real estate education, seminars, and books. Since many of these educational seminars are extremely expensive ($1500-$30,000) and all of my cash from my job went into funding my education, I learned how to operate my real estate business and my other businesses with no cash.

I was on the NO CASH DIET.

If I found a property I wanted to buy, I was unable to buy it because I had no cash and often no credit, so I had to raise the money. I had to learn how to "bootstrap" and keep my operating budgets razor thin. I also had to learn how to motivate and keep team members on the team and working for me with no cash. None of this is particularly easy to do, but I was forced to learn the skills because my passion told me to go into real estate and I "jumped in" feet first.

Cash is never a problem for me today in my business because I started with none, have operated with none, acquired all of my property with no cash, renovated buildings with no cash, motivated teams with no cash, travelled with no cash and have learned how to live with no cash.

My mindset has transformed from a "cash required" mindset to a "no cash required" mindset.

Many people who get into real estate or business think that they need cash for all of the above:

Their mindset is lazy.

Most people think that business is like walking into a McDonald's and buying a Big-Mac. If they want the Big-Mac, they have to buy it cash. If they don't have cash, they can't buy the Big-Mac. Nothing could be further from the truth.

There are many ways to get a no money down Big-Mac, but you need to be creative.

Unfortunately, having cash makes you lazy in your mindset and although I am excellent at operating with no cash, I am not immune to the laziness that comes with having cash.

Whenever I have a windfall profit and suddenly "have cash", I quickly find out how stupid I can be as I spend my windfall profits on stupid, meaningless purchases. I don't go out of control, but I definitely notice that my intelligence goes "down" when my personal cash goes "up".

Understand that money is a drug, the more you have, the more you want. If you have none, money cannot control you. It's very liberating.

In the movie Wall Street 2, there is quote I will never forget. One character asks the other "how much money do you want?" the answer is "more".

We are all programmed to be the same. We always want more money. 

We have some... then we want more, If we have more... we STILL want more. There is no end to the madness and the only cure for the "more" disease is a "No cash diet".

In ancient times, fasting or taking all food out of a person's diet for a few days was a way to purify the body of addictions. It was a way to keep the mind in control of the body and not have the body control the mind with it's cravings and addictions.

Today we have lost the idea of fasting for the most part and let our addictions rule our decision making.

Money is no different. To stop a money addiction, you must fast from money - go on a "no cash diet".

Of course, choosing to be on the "no cash diet" is extremely painful, scary, socially disturbing and many people would rather be dead than live on the "no cash diet".

The truth is, I am no different, I hate being on a no cash diet because it's very painful. However, as Dr. Nido Cubein says: "Pain is mandatory, suffering is optional."

Throughout my life, my passion has forced me into a situations where I had no options but to go on a "no cash diet" to chase my dreams because I literally had no other way.

I wanted to participate in real estate as an investor as a young man, not an old man and refused to become a realtor. I bought the home study course to become a realtor 3 times and have never had the stomach to open it. My only option for pursuing my passion was to operate as a real estate investor with NO CASH.

Since starting in real estate, I find myself in situations over and over again where I am operating a business that is hopelessly undercapitalized but I know how to work the business and grow it to be successful because I have lived on the "no cash diet".

The best way to get on the "No cash diet" is to literally quit your job, have no plans on getting another one and start up a business on nothing but guts and passion. HOWEVER, I do not recommend this for anyone, there is extreme risk with doing something like this... Plus your girlfriend/wife will hate you and potentially divorce you.

I have quit my job with no plans of ever becoming an employee again 3 times and twice I have been forced back into employee-land because I could not assemble a proper business.

The decision to go on a "no cash diet" is a big one, and a decision that 99% of people never choose to pursue because they favour comfort and security over freedom.

Truthfully, I think that many entrepreneurs get themselves into stupid and risky situations that force them into a no cash mindset. I don't think anyone is really born with the mindset because it is too abstract to comprehend. Usually the mindset is created through a combination of the following:

1. Failure
2. Bankruptcy
3. Job Loss/Job Quitting
4. Starting a business blindly on passion
5. Over leveraging to pursue a dream

All of these situations have a pain threshold and have their own risks. However, if you find yourself going through some of those experiences listed above, you will find out that once you get over the initial shock of getting out of your comfort zone and exploring your deepest fears, you will find (if you are mentally tough enough to survive) that you do not need Cash for any aspect of your life.

If you can survive through one of the more traumatic experiences above, you will see money for what it truly is. Money is absolutely worthless and it does not even exist in the first place. 

Money is an enslavement tool that governments print it out of thin air when they need it. Why should governments be the only ones allowed to print? Why don't you print some too?

Once you have removed yourself from being a slave to money and realize that you no longer need it, you will learn to become "the master of money" and see it as a tool build and chase your dreams.

Although no one is born with a "no cash diet", Children who become entrepreneurs often come from parents who are either:

1. Dead, or
2. Incompetent

Dead or incompetent parents forces children into a "no cash diet" early in life and the children never become addicts of the money-drug. These types of children become shrewd, creative and are often wildly successful.

While I type this article at 99 words per minute, off the top of my head, 3 multi millionaire entrepreneurs who had dead or incompetent parents are:

1. Fred Trump, Donald Trump's Father
2. "Rich Dad", Robert Kiyosaki's alternate father
3. 50 Cent

Those of us who learn the "no cash" diet early in life are the ones who have the most time to build and reach for their dreams. I had the luxury of being forced onto the diet at age 22 while many of the men above were forced onto it at age 11 or 12. No matter what your age, consider what a "no cash" diet is and how you can emulate one to free yourself from the money-drug that rules 99% of the population.

Thanks for reading,
Stefan Aarnio
Freedomway.ca

P.S. Share this article if you found it useful!

By Stefan Aarnio
Freedomway.ca

Every single person who ever goes into business "for themselves" has felt the feeling of not earning what he or she is worth. Often this feeling is what employees feel at their jobs every day. This feeling is often strongest when good employees open their paycheque to see relatively meagre earnings every 15 days.

When these same people get fed up with their wimpy paycheque, they quit their jobs, become self employed and charge higher rates per hour (the rates that their employer was billing out to clients) to earn more money. However, the next part of the cycle is one of two things:

1) They either run out of time and hit their new earnings ceiling with escalated risk of being self-employed. 

-OR-

2) They begin to lose clients because they raised their prices and earn the same amount as they did in their job but work less hours.

I know this, because I have been in both scenarios and know the crushing feeling of not living up to my potential. So many  Real Estate investors, Self employed small business owners and all business people get the feeling of not earning our potential.

JT Foxx is one of my teachers and mentors and he has identified the "8 reasons you are not worth what you should be worth at this point":

1)   Time management – so many people who become self employed think that they have earned a holiday - every day. They are still in the "time is money" mentality and trade time for money on a 1:1 ratio. Time management is something that really separates the top earners from the bottom earners. Most people waste huge amounts of time because they are programmed to work on the clock. Time needs to be budgeted and leveraged the same way that money is to grow your business and earning potential exponentially.

2)   Fear - Fear of failure or success is a crippling disease. I have often been stopped in my tracks many times from fear of failure and even more frozen by fear of success in other cases. Fear of prices and fear of spending can often hold entrepreneurs and investors back from moving forward in their businesses. Warren Buffet says "Price is what you pay, value is what you get." Remember: It’s not how much things cost, it’s how much value that your purchase produces that matters.

3)   Procrastination- Top earners are action takers who implement everything at amazing speed. Procrastination ties in with time management, it comes from not having a specific blueprint or plans for success. Often a coach can remedy this and build a specific blueprint for you to remedy this common problem.

4)   Lack of Focus- This is something I personally struggle with. Often, effective entrepreneurs have a mild to severe case of A.D.D. and try to implement everything across the board. Richard Branson has been nicknamed "Dr. Yes" by his investment teams because he says "yes" to every opportunity and needs help with focus. Branson has actually hired specific investment analysts to shoot down his ideas and screen the bad ones. He is very happy to pay people to reject his ideas and maintain his focus. In the words of the wise: "do 1 thing 5000 times instead of trying to do 5000 things 1 time."

5)   Accountability- We are often very bad at identifying our own mistakes and punishing ourselves when we don't hold ourselves accountable. People who do not have coaches often have little to no accountability and this makes it easy for us to allow failure and abandonment of goals to occur. Accountability coaches are brilliant for "checking up" on us when we are about to give up. Hire a coach to check on your goals and ensure that you follow through with your intent.

6)   Lack of Funds- Every entrepreneur, business person and investor needs funds to "run the machine". Many times when we start out, we are WAY undercapitalized and as we grow, we need to raise cash. A common myth in business is that funds are hard to come by. However, in reality, it's talent and business acumen that are much more scarce than funds. If you can prove your skills, you will NEVER be without funding.

7)   “I can do it myself”- This is one of the worst sins a person can utter as a business owner or a self employed entrepreneur. "Doing it yourself" is extremely destructive because it keeps you from building the systems and teams required for a saleable business. People who do everything themselves do not have businesses, they have glorified J.O.B.'s and they ALWAYS BURN OUT. It's a fact. I've had the "DIY" disease for the past few years and am extremely liberated to ditch the dirty habit. "I can do it myself" is the battle cry of an ignoramus and a phrase for self enslavement.  It keeps you pinned as a self employed slave and prevents you from becoming the CEO of your own organization. Another common phrase by a chronic DIY'er is "I’ll do it after I’m successful." This is like saying "i'll purchase fire insurance after my house burns down". You have to build your business right from the beginning, otherwise, it becomes exponentially harder and more expensive to demolish it and rebuild it later. You will get trapped if you try to "DIY" it after getting the business running.

8)   "'I'm not sure what to do" - Most people, especially people who have been conditioned to be employees, have trouble figuring out what to do. We are programmed to take orders, not question authority and execute other people's orders like robots. Once you pull the plug on the J.O.B. and come into the real world, you suddenly have to think for yourself. The two things you can never pay an employee or contractor to do are:

1) Think and
2) Do things in the right order

In the land of the free, you are now the #1 thinker, you drive the ship and have to make the calls. Do not let your ship smash up on the rocks. Of course if you're not sure what to do, you will need to find a coach or a mentor to navigate you on your journey to freedom.

When you look at the 8 reasons why you are not earning what you are worth, the same list can be used to identify why people will not do business with you. Go over the list one more time, take an inventory of the reasons why you are not earning your maximum potential and focus on improving your weak categories. Remember: Where focus goes, energy flows and if you can eliminate your weaknesses and change your mindset then you'll eventually be earning what you are worth and you will be pleasantly surprised.

Thanks for reading,
Stefan Aarnio
Freedomway.ca

P.S. Please share if you enjoyed this article!

By Stefan Aarnio
Freedomway.ca

Photo left: Build your tribe with the 3 most important types of capital.

In the world of business, capital is needed to fund ventures, purchase equipment, land, product, time, talent, people, relationships and leads. Most entrepreneurs and Real Estate investors chase and compete for cold hard capital all day long and never learn about the "other" types of capital that are often more important and powerful than cold hard cash.

When I began in business, all I could think about was cash, profits and revenues. I couldn't see the bigger social, educational or relational picture that was taking place around me. Consequently, when I began in the world of business, I was isolated, ignorant, alone and broke. In the animal kingdom I would have been eaten by a large carnivorous predator.

Unfortunately for me, my fascination with traditional capital had blinded me from the true wealth and value that circulates every day and pays zero in taxes to the government. I didn't realize that business is a TEAM sport and that you cannot run it alone with just cold hard money - or lack thereof.

JT Foxx, one of my teachers and mentors, showed me the 4 types of Capital, and the 3 that most people don't think about.

The 4 types of capital:

1)   Capital (real money) for business: This is the type of capital that everyone thinks about. It's cold hard cash and most people chase it and compete for it. In my opinion, this type of capital is the most worthless of the 4 types and very easy to obtain if you understand the other 3 types of capital.

2)   Educational capital, money for your education: This is an extremely important type of capital. Many people finish high school or university and then never invest in their education again. This year alone, I have invested 3x my college education in educational capital and will have it all earned back by the end of the year. This type of capital is absolutely required for you to grow your business. The people who avoid this type of capital move slowly through life, cannot expand their business geometrically and cannot collapse timeframes. THIS TYPE IS ESSENTIAL.

3)   Social Capital – investing in causes etc. We've all heard of social capital, but so many people don't build their business around it. People do not buy products and services, they buy what you believe in. Social capital is created when you do GOOD things for your community. Make sure you give back once in a while. Select a charity to either raise for or volunteer for that aligns with your business and beliefs. This type of capital is extremely important because prosperity attracts prosperity. If you are going to succeed, you need to be an attractor of prosperity and not hoard to create poverty. People who fail to invest in social capital become isolated, alone and vulnerable. DO NOT FORGET ABOUT SOCIAL CAPITAL.

4)   Relational capital – between people. Relational capital, like social capital connects us on a greater level. People are tribal creatures and in the tribal days, isolated tribe members were cannibalized by other tribes or predators in the jungle. Today the world is no different. Relational capital is formed when you take care of the people around you and build solid, long lasting, reciprocal relationships. This type of capital is the glue that teams and tribes are built out of. Without this type of capital, you cannot bind yourself to other people or create strategic partnerships or alliances to take on bigger missions. Build your team, invest in RELATIONAL capital or die alone at the hands of a bigger, stronger tribe.

The very interesting thing about the 4 types of capital is; the more you focus on the unconventional types of capital, the more opportunities, people, deals and cash you attract. Recently in my own business, I have focused on the 3 neglected types of capital and my business has exponentially exploded. I work on the projects I want to while bigger and better opportunities fall into my lap every day. I focus on my network, bringing value to other people and creating synergies with colleagues. This is where successful people find true wealth and satisfaction in life. Stop chasing the money... The harder you chase - the faster it runs.

Thanks for reading,
Stefan Aarnio
Freedomway.ca

P.S. Please share this article if you find it helpful.

By Stefan Aarnio
Freedomway.ca

At some point, everyone starts at square one. No money, no experience, no deals, no contacts, no team, no business plan and somehow we can all make it happen. 

What do all successful Real Estate Investors have in common? There are 10 required essentials that Real Estate investors MUST have to be taken seriously. When you analyze the best investors like Donald Trump or Robert Kiyosaki and then look at a brand new investor who has never done a deal. There are 10 things that the pros like Trump and Kiyosaki have already established that a new investor will not. 

Phill Grove is an extremely successful Real Estate investor from Austin, Texas. Phill shared his Top 10 Essentials that EVERY Real Estate Investor NEEDS to be taken seriously with me last week in Chicago and I have really been cleaning up my act since then.

Every NEW Investor who is looking for their first deal must have the following before they start raising cash:

1) Websites - We are in the year 2012, a professional website is an ABSOLUTE MUST. It's completely unacceptable to not have a website nowadays, especially considering they cost less than $20 to produce. Professional design looking design is a requirement as are separate sites and URLs for your sellers, buyers and partners. Control your online presence and traffic.

2) Business Cards - Business Cards can literally make or break a first impression. We have all met the person at the networking event who either:

1. Doesn't have a card.
2. Has a FREE card from Vista Print
3. Has a hand written card on loose leaf
4. A neon card that can be seen from space
5. A card that looks like a fake $100 bill

Professional logos these days are cheaper than ever (Think less than $50 online), a proper phone line is a must (Think 1-800 number) not cell your personal cell, your personal email with professional .com address is a requirement, a thoughtful company name, and please... NO GIMMICKS. Remember, if Donald Trump wouldn't put it on his card, neither should you.

3) Voicemail Message - Easy, make it sound professional and get a good script so you sound like a real professional person. Not a party boy/girl or a cave man who cannot communicate. Nothing goofy here.

4) Real Estate Investment Associations - Simple, find local real estate groups, join and begin networking. Really, really simple.

5) Etiquette - So many investors FAIL at this. Make sure you have:

1. A Professional sounding ring tone, I leave my phone always on vibrate so no one ever hears my Apple default ringtone. Although the Apple ringtone is absolutely fine because everyone who is successful has an iPhone with that ringtone anyways.
2. Dress for success, you only one chance to make a first impression and cannot recover easily from a bad one.
3. Talk the Talk, know your vocabulary and be prepared to know what the words of Real Estate mean.
   

6) USP - Develop your unique selling proposition and memorize it. What makes you different? I like to tell stories about deals that went wrong and how I protected my investors. Warranties are also a great thing to offer if you have the guts to do it.

7) Elevator Speech - Very simple, have a 30 second, 60 second and 1:30 second version of what you do and how you do it differently. The key is DIFFERENTLY. Know your Executive summary from your business plan inside out, incorporate your USP, add a dash of emotion and stir for best results.

8) Borrowed credibility - When you start out you have zero relationships, zero credibility and likely zero experience. Find and associate yourself with more successful investors and form relationships to help build credibility.

9) Aura of authenticity - Don’t fake it till you make it, act like you belong. There is a huge difference between the two. Faking never works, everyone can smell your underlying fear. Tell yourself that you have already made it and feel the effects and confidence that comes from the feeling of early achievement. Consider what this means.

10) Mindset - If you think like a five figure person, you will act like a 5 figure person. If you want to be a 6 figure or 7 figure person, learn how to set your mind at that level and think/act like the person you want to become. People are magnets and they gravitate towards people who are tuned to the right frequencies. We set our frequency with our mindset.

These 10 essentials are often overlooked by intermediate and sometimes even advanced investors. If you are new to the game and haven't done a deal, make sure you have these 10 things rock solid before you go soliciting investors. You will blow them away with your aura of authenticity and will look professional right on day one.

Onward and upward,
Stefan Aarnio
Freedomway.ca

By Stefan Aarnio
freedomway.ca

I am often amazed when I meet new investors at networking events with how lazy people can get with their money. Often a new real estate investor is someone in their 30's to 40's, tired of their job, making a steady median income. Since they have a stable job, they are able to obtain easy credit and financing from banks. Often these investors will have access to a home equity line of credit, a wide arsenal of credit cards and will have an RRSP account with 30-40k (if they're responsible) and have saved 10-20k cash and are ready to do a deal - with their OWN money.

The sad thing is, this type of new investor has been working since they were 18 to reach this meagre cash position and they are now in their mid thirties and ready to start investing.

Yesterday, I was attending a local investment club in Winnipeg and I was pleasantly surprised to see how many investors in the club were ready to STOP using their own money and START raising capital to grow their real estate business.

The truth of the matter is, in business or real estate, you will ALWAYS run out of money... ALWAYS. No matter how much cash and credit you have, it always gets 'tied up' in a deal and you eventually run out.

I began investing at the ripe young age of 22 and the great thing about beginning so young is that I had virtually no cash, no credit and no credibility. I had to learn to raise cash, manage my small amount of credit, and leverage credibility. I had to learn the skills required to play the game with no cash from day 1 because unlike the average 35 year old new investor - I HAD NO CASH, NO CREDIT AND NO CREDIBILITY. I was a punk kid who had taken $2000 worth of real estate investing seminars and had to make the dream happen.

My investing career didn't begin to take off until I learned a very simple principle for raising money. This principal has allowed me to raise money for ALL of my deals (except my first one where I put down a small downpayment of $1200 cash). Since I learned the fundamentals of raising money, I have never put down money on an acquisition on any business or piece of real estate under my control.

Most investors think that cash is king, and they are terrified of raising money for a deal. The truth is CASH IS TRASH, everyone has it, and it's actually a very worthless and cheap commodity that can be easily attracted if you understand a few key principals.

There are 3 major parts to putting a deal together and raising all the cash you will ever need. The parts major parts are:

1. The Money = The cash required to start the business or acquire the real estate
2. The People = The TEAM that will operate the business or asset
3. The Deal = The business or asset itself.

Most new investors do not understand the 3 fundamental parts of a real estate deal and run around trying to raise money the WRONG way and they burn their credibility and look like total fools to their network of potential investors.

The Rules of The Money, People, Deal game.

1. The rules are simple: he or she who can obtain 2 of the 3 pieces required for a deal will get the third. For example, if you have a DEAL + PEOPLE... the MONEY will come every time. I have never had a deal fall apart because of lack of funding.
2. If you only have control of 1 of the 3 pieces, you have NOTHING. You are worth nothing and can't make a transaction happen.
3. The most valuable piece in the game is the DEAL. The better the deal, the easier it is to find the money. If you are incompetent or don't want to do the DEAL, you can always sell to another investor for a fee. This is very lucrative and I recommend it every day of the week.
4. The least valuable piece in the game is THE MONEY. This is because everyone has access to it. Money earns virtually 0% on it's own, it's constantly depreciating, and it can come from anywhere for a price. Cash investors will line up for a good deal and will compete and bid if they know it's a winner.
5. The people are interchangeable and so are you as the person running the deal. You are part of the people team. Make sure you have a good team and management style so you can add value to the deal and become an irreplaceable lynchpin. Develop a brand and you will become harder and harder to replace.
6. The deal drives the whole game and is the KING of the 3 pieces. The deal is the piece you should seek first (in my opinion). You can always sell it to another investor if you can't pull it off. I love buying deals from investors who want to pass or cannot close.

So many investors run around, trying to raise money without a team or a deal. This is absolutely the wrong approach.

The correct approach for playing Money, People, Deal is to:

1) Find a deal first, get it under contract with an escape clause and allow yourself a 'due diligence period' or another condition to delay your contract.
2) While the deal is tied up, begin assembling the Team as required to execute the deal.
3) Once you have the deal under control, and the people under control, begin shopping investors for money. Always have a PROFESSIONAL business plan/loan proposal prepared and be extremely thorough in your plan.

Show your investors the:

1. The Best case scenario
2. The realistic case scenario
3. The worst case scenario
4. The NIGHTMARE scenario

It's very important to run your investor through these scenarios and make sure that they are ok with loosing all of their money, or recovering from a NIGHTMARE scenario.

Once you have 2 different investors interested in funding you, you have pressure to negotiate and can close very easy. I like to split all of my deals 50/50 with my money partners because I don't like to haggle and "bite the hand that feeds". I prefer to overpay and reward my partners for investing in me. When I call them in the future, they are delighted to do more deals with me and have a cheque ready for me in minutes. I earn so much money for my repeat deal partners that they don't even think about going anywhere else.

After your first raise, begin building a track record, document every deal into a track record... then - rinse and repeat!

You can repeat this process UNLIMITED times and you will NEVER run out of capital.

What will eventually happen is, you will have more money waiting in your pipeline than deals, and then you will want to find people to bring you deals to keep your machine running. This is a great position to be in, and one that I am currently enjoying.

Homework: Think about the last time you attempted to raise money and ask yourself: Which of the 3 pieces did you have before raising capital? Were you prepared with an adequate business plan? Were you successful or unsuccessful? What could have gone wrong and what could have gone smoother?

Money raising is the ultimate skill of the entrepreneur and one that everyone should learn to perfect. I learned this skill early in life, and I will never be without capital again.

Stay hungry,
Stefan Aarnio
Freedomway.ca

P.S. Share this article if you found it helpful!