“The Top 10 Reasons Funding is NOT Obtained for Projects and Principals”
10. Your Project is not solvent or capable of making money. If I would tell you how many projects we see where the principal or team think that their concept is the best idea since sliced bread, yet have no idea how they would make an investor money or be able to pay back a lender, shock waves would hit you. Literally hundreds a year. Rule #1: Make sure your idea or project can actually work and make everyone, especially the investor, money.
9. Your documentation is not well prepared. Assuming you have a great idea that can actually make money for all parties involved, your formal documentation (business plan, pro-forma etc.) needs to be perfect. Global Star Capital is in high demand for our services because we present perfect, solvent projects to the decision making source entities who have us in place for a reason. We assist in the documentation and back up the project with our reputation and dedication. Rule #2: Have great documentation. Please remove the idea from your head that an executive summary is all that you will need. Part of the engagement process of Global Star Capital is arranging your documentation properly.
8. You have broadcasted your Project around the internet too much–or you have jumped in bed with every novice “broker” out there. The worst thing you can do is broadcast your project around the internet to whoever will see it. Hear me loud and clear—there are only a handful of true lending sources outside of traditional banks (which have dried up) that will entertain your project. The underwriters at these sources do not want to see the same project brought to them by multiple people—that is a big red flag in their minds. These underwriters rely on a high end professional to entertain them with the project. I can assure you that people who work out of their kitchen while feeding their new born babies with one hand and typing that they can obtain for you a “Letter of Intent” with the other are never going to accomplish anything for you. That is what a majority of people on the “Linked-Ins” of the world do. Rule #3: Do not broadcast or “shotgun” your project around the internet.
7. You have signed non-exclusive agreements with many “brokers”. This goes in conjunction with #8 above. There are only a small percentage of “brokers” or intermediaries that can get a project closed. Never forget that. In fact, we formed a screening program at Global Star Capital for serious and non-scam artist brokers to properly vett a project and submit to our us. I am speaking to you point blank—the funding sources in the private funding world rely on underwriters from professional firms or internally within their own “kingdoms” to make decisions on projects. These underwriters have me in place to find those projects. Unless you follow our protocol, you will never be able to have your project’s “story” be told correctly to those underwriters. Rule #4: Do not sign multiple non-exclusive broker agreements, it will hurt your chances of success. These agreements are laughed at by the true money sources and never stand in place.
6. You are paying an attorney for advice on who to hire for professional intermediary services. “My attorney tells me never to pay fees”. I hear that almost every week. My questions are simple in return: “How much money are you paying your attorney to give that advice?” “How many projects has your attorney funded on their own?” and, “Why is your attorney not the instrumental source in finding your funding?”. I can tell you point blank, I am a paid high end professional consultant. I get results, therefore I am paid accordingly. I do not spend my own money to be reimbursed. I bring to your project what has eluded you to the point of reading this blog. If you ever heard of the rock group “Van Halen“, they had to pay the Whisky A-Go-Go venue on the Sunset Strip in L.A. just to perform there. They have sold at least 30 million records if not more. Now, can you imagine if they had a friend, attorney or person they met for one second tell them “don’t pay to play on that stage?” Enough said. Rule #5: Never let an attorney or anyone stand in your way of working with other warranted professionals.
5. You are cheap and have your hand out for everything that is “free”. I have had many potential clients use the term “Angel Investor” as they believe “Angels” exist and have no closing costs. In addition, I have had many potential clients say that they will only pay fees after the loan has closed and they want the fees embedded in their loan. If you believe this, you are literally crazy. I protect my clients full circle. The only way to reach the big show of funding is to follow the protocol and let me work my magic. Rule #6: If you are cheap, have no money and believe that everything should be handed to you for free, quit now. You will never be funded if you are cheap and have those philosophies. “Angels” do not exist in the funding world. I make it clear to my clients that once we are engaged, we fight for you and represent you like the professional you need.
4. You refuse to provide the underwriting team of the investor with additional documentation when requested. I have had clients who have been 10 days away from a closing who refuse to release requested documentation to the underwriting team of the investor such as tax information (as an example) despite being coached properly and perfectly by me personally. Hear me loud and clear. If a underwriting team of the investor wants to know the color of your underwear and they are willing to give you a rate, term and condition suitable to your needs—plus close the deal—you need to follow through. In today’s market, there are hundreds of projects that can be entertained by the facilitators and underwriting teams for investors. One big red flag is not supplying requested documentation. Rule #7: In order to close and receive funding, please know that the professionals working for you such as the facilitators and underwriters must provide the investor (he or she who has the money) with all of the requested documentation. All requests are 100% legitimate and realistic plus kept confidential—just do it.
3. You have too many partners or principals on your team. A majority of rejections to projects I give result from too many people on the team looking for funding. On one call recently for a project in Charleston, SC there were 9 partners on the phone with me. Within 5 minutes I had them disagreeing and fighting over their own idea. In addition, I have had potential clients with a team of “advisors” on calls. These are usually attorneys or “brokers” (people who cannot fund a project themselves). I can assure you that the only people who should make decisions and speak to the professionals in the lending avenues are the head principals. Everyone else will screw up the project royally and create a red flag on your project. Rule #8: Make sure there is one deciding contact person on your project. Make sure that this one person has the ability to answer the major questions that will be asked on the project. Basically, your front man or woman should do most of the talking and dealing.
2. You cannot communicate in a timely fashion. I have a client right now that literally takes two days to return my call or write back to the head underwriter who is wanting to fund his $15 million project. He has put himself in a situation whereas we do not know if he seriously believes in his own project. I cannot stress the importance of communication. When lending avenues call or write, take the time to respond. After all, your project is what needs funded for your dream to become a reality. Rule #9: Communication is the key to success.
You can read more about Rich Cocovich in the MEET THE FOUNDER section of the Global Star Capital website (www.globalstarcapital.com).