You advise borrowing capital from friends and family and suppliers -- anything to avoid trading a piece of the company for venture capital. Why?
I've seen so many young women, young men who use the shares in their companies as an incentive to employees and to people who are loaning them capital. They should not do that. It's a cardinal error for which you will pay and pay and pay.
Getting rich all comes down to ownership. Every single percentage point counts. You don't need to start handing out shares like sweeties, because it will come back to haunt you. In the end, you're going to get your money from the sale of an asset. The less of that asset you own, the less money you will get. It is as brutal and as simple as that.
It can't be fun putting your friends' and relatives' money at risk.
You should tell them you are going to risk losing their money. But if you haven't got the (nerve) to ask people for money because you're going to lose it, then you're certainly never going to get rich.
People will surprise themselves at how much money they can raise. There are a lot of vendors who are willing to take a risk on you -- if you are totally upfront with them and as long as they don't risk too much. That's the way I did it. There was a printer that I stuck with for 25 years because he was the only guy that would print for me when, in the early years, he was not entirely certain he would get all his money.
What have you learned about negotiating?
Serious negotiations should be reserved for serious occasions: when you're selling a company or buying another company. And the people you use to manage your company, who are constantly "negotiating" with staff -- these wonderful managers who work hard to keep everybody happy -- those are not the people you want in a room when serious negotiations are going on. They're too empathetic with the other side. What you want in the room is cunning.
You want experience. And you want an empty, Zen mind.
You have to persuade yourself that you absolutely don't care what happens. If you don't care, you've won. I absolutely promise you, in every serious negotiation, the man or woman who doesn't care is going to win.
VIDEO ON MSN MONEY
Love yourself and be happy no matter what you do or have.
Love your parents.
Love your family.
There YOU ARE NOW A RICH PERSON!
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