T.R.U.S.T.™by Monroe Mann, Esq.
(c) 2011 by Monroe Mann
After losing a major (multi-millionaire) investor in 2004, I decided I would try to figure out WHY. I came up with this acronym:
T - Track Record
R - Rate of Return
U - Unique Investment Opportunity
S - Systems
T - Team
Bottom line: if you lack any of these T.R.U.S.T.™ factors, you are probably not going to get someone to invest in you. On the other hand, if you can meet all five T.R.U.S.T.™ factors, people with money (who are looking to invest) are going to bring out their checkbooks. And they did... for my most recent project, "You Can't Kill Stephen King"--i.e., this technique works.
Now, of course, there are many other reasons why a deal can fall apart, but these five T.R.U.S.T.™ factors are all things that YOU can control. YOU can create a track record for yourself. YOU can create an investor prospectus that shows a high chance for a decent rate of return. YOU can create a unique investment opportunity. YOU can create systems in which investors will trust. And YOU can put together a rock-solid team that instills confidence in your potential investors.
I'll be writing more about this later, but for now, I suggest you make a two-columned list why you meet (or don't meet) each of these five factors. When you do, you will be well on your way to getting potential investors to T.R.U.S.T.™ you.
Oh, and as P.S., if you are raising money for an entertainment project, and you spout of fifty reasons why your investor will make lots of money, I wouldn't trust you. Tell them the truth, "You are probably going to lose all of your money, but if we do make money, we're going to make a lot of it. But... you are probably going to lose it. Do this because you love the project; not because you expect to ever see your money again."
[Legal notice: The acronym T.R.U.S.T. is a legal trademark of attorney Monroe Mann.]