A Crushing Defeat – An investment pitch gone horribly wrong

One of the lowest points of this entire experience was that pitch to my friend and her financial advisor. I am an eternal optimist; I always assume that things will work out for the best. So when I learned that they had agreed to meet me, I thought that this was a done deal! Carol put together a great power point presentation highlighting the success of the Anytime Fitness franchise, and I had a some numbers showing the great returns that current franchise owners have enjoyed so far. Now I have no formal business background, so I had no knowledge of collateral, exit strategy, repayment plans etc. My plan for the meeting was to sell this vision, and present myself as a driven, energetic and passionate entrepreneur. I entered the door brimming with confidence – then it all went downhill from there.

The meeting was at my friend’s house. When I entered, the financial advisor was plopped on the couch. I walked up to him, big smile, arm extended for a handshake, and he just remained sitting. He gave me a half-hearted handshake and I could see he was sizing me up. I’ll admit it, I don’t give off an entrepreneurial, businessman-like vibe. Some days I need an extra large coffee just to elevate myself to “laid back”. Still, I kept a confident demeanour and proceeded to start with the presentation.

Right from the start, I felt that the financial advisor didn’t have a high opinion of me. I never really had the chance to make an actual presentation because I was asked a question after almost every sentence. I understand now that he was really only interested in the numbers, and rightfully so; his job is to protect his client. However, as important as numbers are, when you’re a potential investor, you are investing more in the person. If a potential investor doesn’t believe in you, it doesn’t matter how great the numbers look on paper because they don’t think that you have what it takes to replicate those same profits. I got the feeling from him that I was just another friend looking for a handout from his client. He was clearly disinterested during the power point presentation. He looked at the returns on investment and in so many words said, “This seems too good to be true”. I knew that when I left the meeting, I wasn’t going to get the funding. It was a sinking feeling. My mouth was dry, my face felt cold, and it was a long drive home.

 (The song that kept me going through this tough stretch)

In retrospect, the only thing I can really blame the financial advisor for is focusing solely on the risks and ignoring the opportunity. The biggest lesson I learned here is that you have to make potential investors feel that their money is in safe hands, and that you are also taking on the financial risk. I did neither. It’s always easy to make imaginary decisions about money you don’t have, after all, there are no real risks. Those decisions become a lot tougher when you’re dealing with you own hard-earned money. Whether you have $1000 or $100,000 of disposable income, there will always be reasons why you shouldn’t risk your hard earned money. That is the reality when seeking an investment. Why should someone trust you with their hard earned money? What if your vision doesn’t pan out and you lose that person’s money? As someone seeking an investment, you have to show that your investor’s hard earned money is in capable, responsible hands.

What I learnt from that meeting

As upset as I was about that meeting, the financial advisor made me realize some important truths:

• When seeking an investment, you have to show that you are also taking on some risk. I went to that meeting and basically asked them to invest 100% of the money and I hadn’t put a dime in.
• If you really have no money, you should at least show that you’ve made some effort require funding from somewhere else. Even if you only get a relative to pledge $1000, and you sell your beat up old –insert crappy car brand here– for $500. These things show potential investors that you’re putting your money where your mouth is and that you are taking on a great deal of risk too.
• If you don’t have cash, you can use your car or house at collateral. Before this venture, ‘Collateral’ was an action-packed movie starring Tom Cruise and Jamie Foxx. (Two thumbs down)

This meeting took place in September. I spent the month of August focusing only on this opportunity and didn’t look into any other forms of funding. That was very short sighted of me. I assumed that my friend would be sold on this vision instantly and it would be smooth sailing from then on. In essence, I wasted a month and I was right back where I started. I was frustrated because I saw the amazing opportunity that was in front of me but I couldn’t grab it because I had no money. Since I had yet to put any money in, I had the chance to walk away. I knew that Carol and I had the capabilities to make this vision a success. I knew this was a very rare opportunity – to get in on a proven, successful franchise when it’s still new to Canada. I was sick and tired of watching opportunities pass me by because I had no money. So when Carol said that she would understand if I walked away, I said “No, if I’m going down, I’m going down swinging”. (I actually said that…lol) – I swung.. and I landed another opportunity.

Next post: I compiled a list of every single person I knew. I was so desperate that I even included people who I hadn’t spoken to in years. I locked myself in my room, and started emailing, texting and calling… I swung.. and I connected.