Jay-Z said it best “I’m not a businessman, I’m a business man”.  And he is. He doesn’t work for his business, his business works for him. And that’s how he’s always done it, even back in the days of selling CDs from the trunk of his car.

So what does Jay-Z have to do with other people’s money? Nothing, and everything.

I watched an episode of Bloomberg’s Game Changers, which profiled Shawn “Jay-Z” Carter. I remember back in the 90′s when he first formed Roc-a-fella Records and was featured in Entrepreneur Magazine. On first glance, I thought “why the hell are these rappers in this magazine? They’re not real businessmen“. As I read, I felt compelled to reach out and call up to see if this “supposed” up and coming label was legit. I rang up the number and got ahold of Kareem “Biggs” Burke. After a five minute conversation about my then staffing firm, he said flat out, “look, you can send me the information, but we’re a small company not looking to hire any staff right now. But keep in touch“. Yeah, just as I thought. That write up was lucky PR. Clearly a lucky fluke, but they wouldn’t ever be on par with the likes of Def Jam or Motown. So I never bothered sending the information.

How wrong was I!!??

Fast forward, after years of ups and downs for him and his partners, Jay-Z is on top of the world. And he has forever changed the way I perceive rappers as business owners. Well not all, clearly, but some. You see, he’s not flashy with it. He’s not like some (who shall remain nameless) that like to live like they’re balling out, while behind the scenes they’re in debt to their labels and business partners. But they throw a hot party and always dress nice! HAH! As I was watching Game Changers, it became very clear to me just who Jay-Z the businessman was. Like he said, he’s a business man! The narrator spoke about his rise (and stumbles) and said something that clicked with me instantly. This kid from the projects learned very quickly to NOT rely on other people’s money. I was stunned. Most times, from what I’ve been told, artists that want to spin off their own labels, do so under the direction of the main label In turn, they end up owing the label money for them fronting them the money. At least that’s what I was told.

Jay-Z made it clear from early on that he would continue to invest the money his business made right back into the business to take even bigger and bolder risks. And they have paid off for him quite handsomely. He has studied some of the most brilliant minds in the business world and has formed his own empire based off of smart business decisions, the smartest being always remembering to stay away from other people’s money.

This brings me to startups and tech companies today. Robert Kiyosaki has made a fortune off of telling people to get other people’s money (see, he got your money when you bought his book!). And to a certain degree, I agree. But at some point, if your business isn’t viable, and you keep getting other people’s money, you’re eventually going to end up with a line of angry creditors and investors at your door step. Everyone wants to cheer and laud small businesses for securing rounds of funding. But in my eyes, your business should be bringing in revenues BEFORE you even think about funding, otherwise you’ll be throwing other people’s good money after bad.

At what point do you step back and assess whether or not you have a good business model, plan or hell, even a business period? AT what point do you wake up and realize that no amount of cash infusion is going to make your business make money. If you continually need to infuse the business with outside funding, you clearly have a problem. Think about Solyndra. They were granted a $535 million loan from the government, which in turn went flush down the toilet. The company was not turning a profit, but instead losing money. Why the Bush administration granted them a loan of that size and the Obama administration continued it is beyond me. You can have a really great product that doesn’t make any money. And I think that is what’s missing for entrepreneurs today. Many startups feel that they don’t need to be profitable, they don’t need people actually buying or paying for their products, as long as they can get investment. That’s dangerous thinking.

Trust me when I say if done correctly, other people’s money can help catapult your company. However, your first priority should be on driving revenue. Honestly, I don’t know how venture capital firms come up with the formula they use to award funding. Quite frankly, sometimes it’s as if they put a bunch of companies up on a board and throw darts at them while blindfolded. Have you seen some of the utter nonsense they fund? Yet I can’t get a venture capital firm to even return my call about diversity initiatives. LOL Well, what are you going to do?

Make sure you map out your business and financial projections so you can understand the health of the business and where you’re going. It’s OK to seek outside funding, but make sure your stuff is right first. Take emotions out of the equation and surround yourself with people who understand sales, finance and business if you don’t understand yourself. Before you venture off into entrepreneurship, at least take a class to help you understand the basics. Jay-Z learned on the streets, reading and trial and error. Follow his lead. Educate yourself so you don’t need other people’s money…or at least not that much of it.

Til next time,

Adrienne Graham
“I’m not a businesswoman, I’m a business“

Check out my new book Get Recruited: Secrets from a Top Recruiter on Using Unconventional Tactics to Get Noticed in an Inconvenient Economy in paperback or on Kindle!

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Adrienne Graham is the Founder & CEO of Empower Me! Corporation (www.empowerme.org). She is a strategist that helps people grow their career, business or network in any economy. She is the voice behind Views from the Top Radio Show, and the creative visionary behind Empower Me! Institute and Empower Me! Magazine. Her writing and shows focus on Career Management, Networking Strategies, Entrepreneurial Success and Small Business Management. You can also find her causing a ruckus on Forbes.com.