Dan Miller, the Founder and CEO of Steward, a lending platform for regenerative agriculture, and Co-Founder of Fundrise, shares insights on how to raise money for a business. Having raised capital for his own companies, Dan emphasizes the importance of finding values-aligned, patient, and flexible capital, which is not typically associated with traditional investment sources.
Many businesses turn to venture capital and private equity for funding, but Dan explains why these options may not be suitable for everyone. The majority of capital in private funds does not belong to the principals, leading to liquidity challenges and a singular focus on high returns. This can result in a commoditization of capital, limiting a company’s ability to maintain stability and values while seeking outsized returns.
Instead of relying on traditional investment funds, Dan suggests considering direct fundraising from individuals who have a personal interest in the project. However, regulatory constraints make it difficult for private companies to raise capital from a broad group of investors, as most offerings are limited to professional funds. Dan has navigated these challenges by exploring creative fundraising paths that comply with financial regulations while allowing for broader investor participation.
By building relationships with values-aligned investors who care about the business’s mission, companies can establish a more resilient and supportive investor base. These relationships can provide stability and flexibility, especially during challenging market conditions when traditional capital sources may be scarce or expensive. Dan advocates for focusing on slow and steady growth by nurturing relationships with individuals who believe in the project and are willing to support its progress.
Ultimately, rather than seeking funding from traditional venture capital or private equity firms, Dan recommends raising money from individuals who share the business’s values and vision. These investors, ranging from friends and family to local community members, can provide a unique customer and investor experience that fosters referrals and additional capital. While this approach may require more time and effort, it can lead to a more personally rewarding and stable foundation for business growth. It is important to consult with a licensed professional for specific investment, tax, or financial advice.
