Financial Insights, Start-up Financing | October 8, 2013
Often, financial assistance is necessary for a start-up business. However, not all investors want to be silent investors and simply provide money. Here are some facts you want to know if you plan to have investors in your business:
You will not be the only boss anymore. A portion of business ownership will be sold to investors. You now need to report to, and work with, the investors as a team. Investors will get involved in a lot of daily decision-making as well as strategy, business planning or human resources.
Differences of opinion. An even bigger challenge is that they may not have the same vision as you do. You might be working on a long-term business plan but your investors may only see short-term goals for quick returns on their investment.
Not all is an up-hill battle. Investors can bring skills and experience to benefit your business. For instance, their business may have large domain expertise in your industry, market, and in the development of your type of product. You have to understand that the majority of investors are not just bringing money to the table to help you but are operating a business as well, and are seeking a return on investment.
By Karen Milde, Reframe Marketing, Vancouver, BC, CYBF mentor