Best of: Are You Begging for Money?

Today's episode was originally posted in April of 2018. We are talking about the psychology of raising funds from investors.

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Episode Transcript

(00:01):
Welcome to the Real Estate Espresso podcast, your morning
shot of what's new in the world of real estate investing.
I'm your host, Victor Minash, and today we are talking about
begging for money. That's right, you heard me,
begging for money. I hear from many real estate
investors who are looking to raise capital how uncomfortable
they are asking for money or begging for money.
Well, think about it. When you encounter someone who's

(00:23):
begging, whether it's begging for money or begging for
anything, many people immediately say no because
begging or desperation is rarelyattractive.
I mean, think about it. Let's go to the other end of the
spectrum. I'm thinking right now of Ken
McElroy, one of the Rich Dad advisors.
And when he goes to raise capital on a project, he simply
puts out an e-mail alerting people that are part of his

(00:45):
community of an upcoming project, and he'll typically be
fully subscribed within less than 24 hours on a multi
$1,000,000 capital raise. There's no begging.
They're simply providing information about an opportunity
and people jump at the opportunity.
So let's think for a moment. What is it about these two polar
opposite approaches, both of which involve the transfer of

(01:08):
money from someone making an investment to an entrepreneur
who's trying to better their lives?
I would suggest the difference between these two approaches
comes down to nothing more than context because the content of
the message is the same. It involves the transfer of
money from investors to an entrepreneur who's looking to
better their lives. But the context is different.

(01:28):
So let's do a little exercise here with you, the listeners.
And I know we'll have to describe this over the airwaves
so that you can visualize this, but I'd like you to hold up your
right hand and hold up your index finger and your middle
finger. And I'm going to ask you a
simple question. What number?
You've got 2 fingers being held up.
So what number does that represent?
Most people would look at that and they would say the number 2.

(01:51):
But until I gave you the contextof number that wasn't available
to you. Now keep your hand up and I'll
ask you what are those body parts?
And most people will say, well that's fingers.
But until I said body parts, fingers were not available.
And if I said, what letter does that represent, Most people

(02:11):
would say the letter V, But again, the letter V wasn't
available until I set the context.
And if I asked you what political statement might some
people might say either peace orvictory, again, it wasn't
available until I set the context.
So we often spend a lot of time stuck in content, when in fact

(02:33):
the reframe that's available by setting the context makes the
difference. So I never ask for money.
What I do instead is Ioffer people the opportunity to
collaborate with me on a project.
That's a completely different posture.
It's a different context and it's a reframe of what amounts
to the same question. But it's a vitally important

(02:55):
it's not just playing a game with words.
It is a completely different context.
Now, just like a new context canbe very liberating, your
existing context can be very confining and very imprisoning.
And I would suggest that for many of you, the prospect of
raising capital you equate with asking for money.
And if that's your context, that's exactly what you're
doing. But if your context is

(03:17):
different, if your context is 1 of abundance of offering
opportunity to people that are important to you in your life,
that's a very generous act. There's nothing selfish about
that in the least. I mean, think about it.
If you had a relationship with somebody, someone who you truly
value and they've got capital that they could put to work and
you had a compelling opportunity, something that was
so, so amazing that if you didn't offer to them, they would

(03:40):
be hurt. You have a responsibility, if
nothing else, even out of a sense of loyalty, to offer them
the opportunity. Otherwise, you're not valuing
and honoring that relationship. Now, of course, if the answer is
no, the context hasn't changed. The relationship is far more
important. Remember, we're starting from
the context of relationship, andbecause the relationship is

(04:01):
valuable, you're being offered the opportunity.
Doesn't mean that the answer needs to be yes.
No is a perfectly fine answer. Probably the only answer that's
no good is a is a is a maybe, because then you have neither a
yes or a no. But asking the question honors
the relationship. In future episodes, we'll be
examining this question of context in a number of different
settings because the reframe that becomes possible by setting

(04:23):
a new context can be extremely liberating.
And don't go out and start offering people marginal
opportunities. That's not the idea.
If you have something that's truly compelling, that's when
you have the responsibility to offer some of the opportunity.
In the meantime, think about theopportunities that are in front
of you and how you might frame the question.
Have a spectacular day and make some great things happen.

(04:44):
We'll talk to you again tomorrow.