My Biggest Fundraising Mistakes
We initially took on outside capital in 2021, setting us on an often suffocating race for more.
After officially crossing the fundraising finish line (technically for the third time) last month, this is my first time reflecting on my lessons learned.
What better than to share them with a bunch of strangers?
So here I go… Prepare to read not a story of triumph but how tragically mistaken I was and what I've learned in the process…
Setting the Stage
In early 2021, Dan Briscoe and I walked into Randy Blount's office to discuss the future of BuildWitt. Randy was a trusted customer, and we needed his sage business advice.
Little did I know that one seemingly small meeting would dramatically alter BuildWitt (and my life by proxy) forever.
For three years, I couldn't get so much as a line of credit from any bank. Despite colorful pamphlets declaring their love for small business, they certainly had no love for mine. Only in my early 20s, I had no assets to my name. No assets = lending.
As a result, we became crafty on how we cash-flowed our growth. Using a combination of American Express and discounts for contracts paid in full, we grew BuildWitt into a small team with a national reach.
But our mission from the first year of business was to impact the entire Dirt World—by helping those building our world attract, train, and retain the next generation.
Back to our meeting with Randy… Dan and I knew we needed outside capital to grow our impact, so we asked Randy what he thought about asking our customers for it. To keep this simple, I’ll say he liked the idea.
The Reality of Outside Money
A friend's father, a VERY successful businessman, once described growing a business to me as living with an alligator in the living room.
"You feed it, or it eats you. And it only gets hungrier."
I missed his point then, but I understand it now.
Taking on outside capital is like buying a baby alligator. You're EXTREMELY excited at first. It's a cool little dinosaur that poses no threat. You show all your friends, and everyone thinks you're cool. Then you start thinking you're cool. All benefits, no downside.
But the baby alligator grows, and the more it does, the more it eats. Now, instead of little morsels, you must buy entire steaks. And it's certainly not as cuddly anymore.
The Spending Begins...
I'll stop beating the alligator analogy to death and get back to the story — In the summer of 2021, we had access to outside money for the first time and started spending it.
By fall, our spending wasn't slowing. Rather than cold water on the face, the obvious solution was MORE MONEY.
My genius plan was to meet with three companies I knew the ownership of and ask for capital in exchange for equity in BuildWitt. Strike one. Strike two. But the third? I hit a home run.
With the next cash injection in the bag, we returned to work. And spending.
Details aside, we now fast-forward to the spring of 2022. We needed more money. See a trend?
But no problem. Why couldn't we raise from folks in the Dirt World a third time?
And that is where this newsletter officially begins…
My Mistakes, in No Particular Order
- Adjust the Plan as Needed
We planned for our recent round to go from April — December of 2022. Again, we finished last month. Ouch.
Giving up wasn't an option, but I learned it was dumb to grind myself into dust over a flawed plan. And the initial plan was undoubtedly flawed.
It took me a while to realize how flawed it was, but we eventually made vital adjustments to set up the right deal for everyone. I don't believe we'd be in business if we had maintained the initial course.
- Humility is Key
Duh. But after raising the first sums, I thought I knew what I was doing. How wrong I was. Only when I stepped back and acknowledged my shortcomings was I able to make progress.
I still feel a great deal of shame when I think about how certain I felt only a few years ago. My sense of false humility is startling, but I've used it to ground myself further.
- Ask for Help!
I'd deserve an ass-kicking if I wrote this without acknowledging the help I received along the way.
Initially, I took on the weight of fundraising and went to work. But it only got heavier...
I didn't ask for help out of pride. I'VE GOT THIS.
But I realized all that mattered was the outcome, not my feelings. So, if someone could lend a hand in the process, I became more than open to it. I ultimately asked for a lot of help, and thank goodness I did.
In this vein, I also eventually leveraged outside counsel to better understand our situation. Free from the day-to-day and emotions, people on the outside can see things SO much more clearly.
- Rejection is the Price of Admission
When I began fundraising, I thought it was more of a “yes” game. LOL.
My stomach still turns when I think about all the times I've heard "no." But I've never met anyone successful who's only heard "yes." Rejection is essential to the equation, and learning to process it emotionally without becoming discouraged is critical.
- Don't Drag People
Ironically, I spent way more time with the people who said "no" than those who said "yes."
We were looking for very particular individuals — needles in a haystack. Had I identified who wasn't that kind of person earlier in conversations, I would've saved much time and frustration.
- Know What Game I’m Playing
When I began, I didn't know what the "right" way to raise money was. As a result, we made up the terms and overall process.
I'm thankful where we ended up, but halfway through our latest round, we tried switching from our game to the traditional game.
What I mean is that we started meeting with venture capitalists and private equity folks—at least fifty of them.
How many said yes? Zero! Because we weren't playing by their rules. I should've known better. While I got quite the education, there was zero chance of success.
- I Have No Control Over Outcomes
I visualized the ending of our investment A LOT. It'll be done by July 4… July 4 came and went… It'll be done by Halloween… On and on. The lesson was that I didn't control when it would end. I couldn't make the decision for others.
All I control is my effort, attitude, and belief.
- People Buy People
I wouldn't have succeeded if I had relied only on facts to raise the money. People invested in me first—in my belief and vision for BuildWitt.
But that said… No money is free. Everyone wants a return. So yes, people buy people, but then you must deliver.
That said, I should probably stop writing and get back to delivering for those who have trusted us with their dollars, our customers, and our team. See you on the next one!
Dirt Talk Podcast
In this episode, Aaron is on his own to bring you another book report. He’s picking up where he left off in the Persistence Creates Opportunity: Building America for 50 Years, a book made for Ames Construction that periodically details their history.
In this episode, Aaron reads from the 1960s to the 1980s, which was a pivotal time in the history of Ames. They talk about the changing business and personal life of Dick Ames and some of the most important contracts that the company ever won. To learn more, stay tuned for this week's book report.
Vlog
We visited Jordanian phosphate mines last December thanks to our friends at The Near East Equipment Company, Jordan's Komatsu dealer.
It's hard to overstate the importance of phosphate in the world — without it, we couldn't feed over half of the humans on Earth.
However, the mining process is somewhat straightforward. Mining companies use large excavators, like the PC3000 and PC1250s we saw, to strip the overburden from atop the phosphate deposits.
Once exposed, loaders scoop up the white and grey substance, and trucks haul it to nearby plants for further processing.
And the mining efforts go on and on, crossing enormous swaths of the Jordanian desert.
I'll see you next month! Don’t miss out!!
