Why would Zuckerberg receive a $500,000 injection into his Facebook while dismissing a whooping sum of $10 million?
The answer lies in selecting an investor based on particular qualities. Money is one of them, but some considerations are more important than cash. Here are some of them.
The Gaps the Investor Will Fill
A SWOT analysis of your startup is necessary. More specifically, determine what your strengths, weaknesses, opportunities, and threats are. Then invite investors into your company to fill a gap.
For example, perhaps you have a strong technical team, but your management skills are inadequate. Then go for an investor who excels at managing staff and company resources.
In some cases, you might have a business idea and the capital to bring it to fruition. However, you might lack the technical skills to do it. Start a business with an investor who has these skills so that the two of you can benefit from your idea.
The Time and Energy the Investor Will Dedicate To the Startup
Unfortunately, many investors feel as though their only role in the business is to provide financial capital.
That is not the case. Everyone who owns a share in the company has to dedicate some time and energy to it. You cannot do all the work while an investor does nothing.
Surprisingly, the investor expects to receive profit at the end of the year or month. That is preposterous.
Eventually, you will feel cheated because you are doing everything. Then the business will collapse because the investor is not filling the gap that you want him to fill.
Large companies avoid this scenario by defining the role of each investor clearly and definitively. Legal implications arise when investors neglect their responsibilities.
The Interaction That You Have With the Investor
Personal traits matter when it comes to business. For example, how quarrelsome is your potential investor? What motivates him? Who are his business partners? Does he engage in any activity that society finds appalling?
The answers to these questions will tell you the effect the potential investor will have on your business reputation and culture. For example, a quarrelsome individual encourages the buildup of negativity
in your organization.
Similarly, imagine if money is the only motivation for your investor. In this case, appreciating your vision for the startup might be difficult for him if your focus is on growth and the fulfillment of a dream.
Share this information with your friends. It will help them make the right decisions when it comes to selecting a business partner. You can share it on all your media platforms including Facebook and Twitter.
Check these links for additional information on this topic. Here and here.
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GUIDE: quick summary business exit
- Judy Robinett
- Publisher: AMACOM
- Edition no. 0 (02/05/2019)
- Brad Feld, Jason Mendelson
- Wiley
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- Michael Young
- Kindle Edition
- English
- Stephen R. Poland
- 1x1 Media
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- Alejandro Cremades
- Wiley
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Last update on 2019-04-01 / Affiliate links / Images from Amazon Product Advertising API
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