I caught up with an old friend, and fellow entrepreneur, this past week. It had been a few years since we spoke at length, and the last time we chatted, he briefly mentioned how he was starting his own renovations company. Before talking, a mutual friend of ours told me that his business has taken off, but that it had branched off into new, more significant ventures.
Long story short, this guy has built an innovative business model for creating housing solutions for assets previously in financial distress or incomplete. Being very interested in the real estate market, it’s compelling. Most important, my long-time friend is currently looking for *investors to rapidly expand his business now that he has substantially de-risked the model by implementing a reliable system – sort of a wash, rinse and repeat situation…
*As I’ve written about in the past, investing in other entrepreneurs is a great way to boost your revenue streams. Leverage the brilliance of other entrepreneurs!
Ideas Are Nothing Without a Crazy Entrepreneur
During our chat, my old friend explained to me how over the last 24 months or so he had ascended rapidly into the property development business, with a novel approach. It started out when one of his family members, an architect, came up with an ingenious idea. However, like so many great concepts, it was just that – no capital to back it up, and it had been sitting on the shelf for years. That is, until my friend, a pretty ballsy guy not afraid to stick his neck out, jumped in head first.
His family member, the architect, came up with the brilliant idea. However, he is pretty introverted. Introverted people don’t typically do well raising capital for their ideas. So, it never went anywhere until my friend decided he would put the capital together to tackle their inaugural project and see if this thing could fly… bring it to life.
He raised roughly $1 million (which consisted largely of his life savings, family and friends’ money). He offered those initial ‘investors’ a fixed return by a given date, that way keeping all the equity in the company between him and the architect. However, the fixed return ended up cutting into their margin dramatically, almost making that first project unprofitable. Nevertheless, they did it to prove out the model, work out kinks etc. so they could eventually take things to the next level.
Inventor Syndrome – Nervous After the Money Arrived
Initially, the architect with the brilliant idea was shocked and somewhat nervous when the funds were raised. His idea would now be put to the test – something that for many inventors brings about a moment of anxiety. Self-doubt.
This idea would have never been realized without my friend – the proverbial ‘money man.’ Raising money is viewed by many inventors, and entrepreneurs for that matter, as a daunting and even scary job. Thus, most great ideas never leave the drawing board.
The two of them have now completed dozens of projects both in Canada and overseas. Moreover, all this happened in roughly the last 24 months – from nothing but an idea to essentially an international property development business.
The Talker and the Trade – Need Both
Like so many great businesses we see today, be it the Googles, Apples, Facebooks of the world, without a crazy risk taker willing and able to put their neck on the line by raising that initial capital, amazing ideas rarely ever take off.
My friend explained to me that had that first project not worked out, he would likely have had to sell the home he lived in and move back in with his parents. Also, because he had raised capital from family and friends, it would have made for awkward Christmas dinners!
The architect with the brilliant idea would have never taken that reputational risk to raise the money. He’s the idea guy; and like many inventors, he loathes the thought of pitching investors. Thus, an epic partnership formed. One in which I am seriously considering investing a healthy chunk of capital into.
Whether you’re the idea gal, or the capital generating guy, you can’t build a business alone. Yin and yang. All great businesses need that crazy fucker willing to stick their neck out on the line for a brilliant idea and raise the money. Nine times out of ten, that person raising the money isn’t the one with the brilliant idea!
PS There are many fascinating real-life stories about entrepreneurs and innovators from which we can glean valuable knowledge. I write about them in my newsletter, which you should subscribe to below… only my best content will land in your inbox.