Many business owners, especially startups, are usually of the belief that investors are vital for their growth. This is not entirely untrue, but it is also not totally true either.
There are various forms of investors which range from;
- A silent partner who invests without participating actively
- Investors that may choose to have active involvement in the business
- Angel investors may want to be actively involved in your business till you get other forms of funding and cash out.
Investors have precise objectives and goals which they anticipate that you meet. Every kind of investor will interact with your business in a manner that is different from the way you do. However, before you completely buy into getting investors for your business, you need to consider if you actually need these investors.
The truth is; a lot of businesses will do better without the help of investors. By understanding the possible issues that may arise with this type of help, you may be able to better decide if you should go with an investor or find alternative sources of finance for your business. But first, let us at a few tips on how to land investors.
How to Get Investors for Your Business
There are many avenues to locate investors for your business. However, below are some of the top options to find angel investors and venture capitalists for your business;
- Send applications to accelerator programs
- Use your industry mentors
- Search online
- Go through Angel Investors Networks
Should You Get Investors?
It’s pretty simple. Would you instead run your business the way you deem fit or under the authority of someone else? If this is not enough to conclude, the following are a few other reasons you should not.
Most times, investors want to participate in making decisions. In other situations, they may wish to participate in the little intricacies like the office interior design or the logo design of the business. For a lot of people who start a business, they do so because they do not want to report to anyone else and enjoy being independent. However, when you have an investor breathing down your neck and trying to control various areas of your business, it may not feel like independence.
The situation becomes worse when the decisions are core ones. They may want to make moves in your business that you don’t support or believe are profitable. This could result in a lot of friction in the long run.
Inability to Change Focus Freely
As your business goes further, you may decide that the best course of action to take is to change the focus of your business. This has been the case for many businesses where the owners found out that taking another direction was more profitable, and they were spot on. However, your investors may not support your new decision, which may lead to resistance and friction between them and yourself.
Your investors have added their resources to the growth of your business, and for this reason, they desire growth. This is not entirely unfair or unexpected. However, they may have higher requirements for performance, which can bring you lots of pressure, particularly if you are unable to meet them. You need to be certain the expectations of your investors align with your capabilities and projections before you accept them.
What Route Should You Take?
Going with an investor may provide you with additional capital, which can help grow your business at a faster pace. However, this comes with its drawbacks as we have covered above. The major drawback is the fact that you end up sharing your control and profit with your investors, who could even later turn around to own your business.
A less risky method that helps you maintain your business reputation and keep control is to earn your funds and locate free education regarding how to market and begin selling. This way, you will have the right foundation to expand your business and enhance your profit.
For more information about how to market your growing business the right way, contact us at firstname.lastname@example.org or (866) 354-6448.