The philosophy I used to raise over $100m

In this article I delve into the following ideas:

• The philosophy I used to raise over $100m in my career.

• How to build a group of lifetime investors.

• My Entrepreneurial Philosophy: The Bedrock of My Success.

Welcome to this week’s VALUESTACK

I figured I’d write about business in this issue. Over the last several months I have been helping quite a lot of entrepreneurs come up with capital strategies for their SMBs.

It’s made me reflect a lot on my own ideas. I quickly realized that I never just think of “ME” when I start any venture.

Which is likely a big reason why my friend Bernie told me just last week, he’s in for up to $500k on an investment that he knows almost nothing about. That is to say, there is no deck, he’s seen no financials, for all he knows I could’ve made it up.

Of course, it’s real, I didn’t make it up. But the point is. It feels good knowing the money is there if I choose to go forward with the acquisition.

In the entrepreneurial world, there's an abundance of advice on scaling businesses and social media presence, yet an equally crucial element exists.

And no one talks about it.

I am talking about growing a reliable investor group. A network that you can confidently call upon to raise $50k, $250k, or even $1m, with a phone call.

This might be my greatest accomplishment. And most valuable asset.

It starts with my philosophy. Share the P. I. E. 

Prove the concept, Inject capital, and Exit. Each stage is integral, not just for the business in question but for nurturing a long-term, symbiotic relationship with investors.

PROVE IT

The initial phase, 'Prove', is what I like to call the entrepreneur’s laboratory. Here, the focus is on establishing the business’s viability and potential for growth.

It's about rolling up your sleeves and experimenting, demonstrating that your concept isn't just another fleeting idea but a sustainable, revenue-generating venture.

This stage is crucial for gaining the initial confidence of investors. It’s the part where you take away most of the risk for the rest of the group. It’s the part that ultimately entitles you to have the lion’s share, while I participate as a passive capital partner.

INJECT CASH

Once the concept's viability is established, we move to the 'Inject' phase. This stage is about strategically expanding your business with the right amount of capital. This can be structured many ways.

• Loans or LOCs sourced from private funds.

• Capital raised on a SAFE agreement (pre-valuation), equity deals.

• Convertible notes

• Mezzanine structures

• Debt-Equity Swaps

I consider it the big party I’ve been planning since the start. I’m going to invite all my friends to come along for the ride. And I am going to structure a debt or equity deal that I know will make everyone an ROI. How do I do that?

By considering my Exit. Or more specifically their Exit. Whenever I raise an early-stage private funding round, I consider how I’m going to ensure that my early-stage investors get their money back as fast as possible.

I spend part of the funds to shore up certain elements of the business to make it more appealing to private equity or institutional funding.

Along the way I am also deepening relationships with investors. In this phase, investors are not mere financiers; they are partners sharing your vision and vested in your success.

EXIT

The final phase, 'Exit', often misconstrued as merely a financial endgame, is actually a strategic liquidity event. It can be several things.

• A Private Equity round buying out some of the early-stage (Angel) investors.

• An SBA or bank loan.

• A merger or acquisition.

• Another private round, or equity round that buys out the debt or wherein the initial debt converts to shares.

• It could even be an IPO theoretically. Though I typically time this first “exit” for 2 years from the initial round, 3-4 years into the business’s life cycle.

A well-timed exit can significantly amplify returns for both the entrepreneur and the investors. But more importantly, a successful exit lays the foundation for future collaborations. It turns one-time investors into lifelong allies.

WHY DO I PREFER TO SHARE THE PIE?

What sets the PIE philosophy apart is its emphasis on the investor-entrepreneur relationship. Traditional entrepreneurial strategies often undervalue this aspect, focusing predominantly on the business or the entrepreneur.

PIE, on the other hand, is about growing all dynamics together – the business, the entrepreneur, and the investor group. It recognizes that investors bring more than just capital to the table – they bring experiences, insights, and networks, all of which are indispensable for sustainable growth.

It’s the answer to the question I have faced many times in my life upon exiting a business; “what do I do next?” PIE - Then Repeat. PIETR, also happens to be most of my last name, PIETRZAK. Clever, huh?

Sharing the P.I.E. challenges several misconceptions about raising capital. It demystifies the notion that capital injection is a one-time, transactional event. Instead, it fosters a culture where investors are integral members of the entrepreneurial journey, engaged in a continuous cycle of growth, feedback, and reinvestment.

It also breaks the stereotype that substantial funding can only be sourced from venture capitalists or institutional entities. In reality, a diverse investor base, including friends, family, and individual angel investors, can be equally potent if nurtured properly.

In conclusion, the PIE philosophy is more than a business strategy; it's a holistic approach to entrepreneurship. It underscores the importance of a strong investor base, not just in monetary terms but as pillars of support, guidance, and trust.

And it’s led me to some of the deepest friendships and most meaningful relationships of my life.

In an entrepreneurial landscape that's rapidly evolving, where the only constant is change, having a reliable, engaged, and dynamic group of investors can be the difference between fleeting success and a lasting entrepreneurial legacy.

How Divine Intervention Healed My Sciatic Nerve Pain

When it doubt, just ask the guy at the front desk…

It was a typical morning, and I was gearing up for my workout, a ritual I've faithfully adhered to despite battling persistent sciatic nerve pain. This pain, usually confined to my back, took an unexpected turn that day, shooting down my left leg with an intensity I hadn't experienced before.

Running 4-6 miles daily, I had grown accustomed to a certain level of discomfort. However, the pain had escalated recently, disturbing my sleep and challenging my endurance.

On this particular morning, the pain was so acute that I made the unusual decision to cut my workout short. As I was leaving the gym, a spontaneous question to the familiar face at the front desk altered the course of my day - and perhaps, my perspective on divine workings.

Why I chose to ask this individual about sciatic nerve pain, I can't fathom. It was uncharacteristic of me to seek such advice randomly, especially after years of personal research and various stretching attempts.

Yet, the response I received was nothing short of miraculous. The gym attendant, with a knowing look, guided me to a bench and demonstrated a simple yet effective stretch.

Lying on the side opposite to the pain, extending the painful leg, and flexing my foot inward while applying pressure to the sore area brought an astonishing relief. The pain, which had been a constant companion, receded by about 70%.

I have looked everywhere for a detail of this stretch as a remedy for sciatic nerve pain. I cannot find it. The best I can guess is that it’s some modified piriformis stretch. Whatever it is it worked for me. It has alleviated years of chronic pain.

This encounter, seemingly mundane, bore the hallmarks of divine intervention. In the midst of my struggle, a chance interaction became a channel for healing.

It reminded me that God often works in the most unexpected and ordinary moments, using the most unassuming people as instruments of grace. The relief I experienced was not just physical but also spiritual, reinforcing my belief in the mysterious yet omnipresent ways of the divine.

In sharing this story, I hope y’all remain open to the myriad of ways in which God can manifest in our lives. Often, it's in the simplest of moments and the most casual of interactions that we find the answers we seek and the relief we yearn for.

This incident is a testament to the unpredictable yet always timely workings of the divine, a reminder that even in our routine lives, there's room for miracles, however small they may seem.

Have a wonderful week. Mike P