by Catherine Hoke, founder and CEO of Defy Ventures
If you knew entrepreneur Marquis Hayes 10 years ago, you would barely recognize him today. The now successful CEO and founder of Brown Butter New York, a company that produces high-end cooking butter, was once a court-described “menace to society” whose life was overrun by drugs, gang-related assault, and armed robbery.
But that’s the transformative power of opportunity. Hayes embodies the power to rise above our beginnings and create something entirely new.
His history with drugs and violence could have easily led to a cycle of crime, poverty, and incarceration, as it does for many people with criminal records. But he chose to move forward with a positive attitude, raise seed money for his company, and network his way to a profitable future.
How to Position Yourself for Funding.
Starting a company can be difficult for anyone. But while most people get funding through traditional forms of debt or equity, these options are often unavailable for those with criminal histories. Banks are conservative in choosing their lending candidates, and venture capitalists and other investors are often turned off by a criminal past.
But even if you have a criminal record, there are creative ways to get funded. Here are six things you can do to make your startup look attractive to potential investors:
1. Bootstrap your business.
The best way to impress independent investors is to prove your business is viable by “bootstrapping” — or self-funding — until you gain traction. Start small, generate revenue, and create a profitable business before you approach an investor.
2. Be honest and relatable.
Don’t be shy about your past or it will look like you’re trying to hide something. Instead, own your criminal past, and explain to investors how your past can actually be a benefit to your business. (For example, the drive and charisma required to hustle on the street may lend itself to legal sales.) Many investors value the lessons learned from failure.
3. Expand your network.
Your business network can be even more important to your success than the product or service you offer, so start networking now. If possible, get into an entrepreneurship program that connects you with investors who will be more likely to take a chance on your business.
If you don’t have access to an entrepreneurship program, launch a “friends and family funding round,” and ask people in your personal circles to help fund your startup through a crowdfunding website like Kickstarter or Indiegogo.
4. Get a mentor.
The most critical person in your network is your business mentor. But don’t just jump on the most powerful connection you have. A mentor with direct experience in your industry can be extremely valuable.
5. Do your research.
A natural part of the startup life is the feeling of “building the airplane as you fly.” But believe me; that metaphor doesn’t apply to the legal and financial aspects of your business. You need to know the rules of the game or risk losing by a technicality. When it comes to venture capital lingo, the more research you do upfront, the better impression you will make on potential investors.
6. Practice resilience.
Sometimes you’ll fail and get rejected, and that’s a normal part of the process. What matters is that you don’t let failure derail you from your goals. When you don’t get the results (or the funding) you want, pick yourself up and try again. That’s the kind of realistic but positive energy investors want to see.
The mistakes you’ve made in the past don’t have to define you, and a criminal history shouldn’t keep you from getting the funding you need. You can use the lessons you’ve learned about survival and resilience to win over investors, build your business, and create a new legacy for yourself.
Catherine Hoke is the founder and CEO of Defy Ventures, a national nonprofit that provides entrepreneurship training, executive mentoring, startup funding, career development, and job development for people with criminal histories. To find out more about how Defy Ventures can help you or someone you love, click here.