New entrepreneurs think that equality in capital exists, but that’s not true. If they don’t find out about this soon, they are going to find out later, probably in a harsh way. It’s logical to love and cherish your company since it’s something you created from scratch on your own or with a team of trustworthy people, but emotions can make a high impact on your decisions.
There have been many times that a business partner thought that his company needed an investor, even though the organization was not facing equity problems at that moment. This act, in many cases, can later cause serious problems to the company that may even lead to partners’ withdrawals.
Another scenario that you should avoid, is taking money from family members. These are people who are connected emotionally to you and they may influence you negatively. Their pressure can lead to making bad decisions for your business, that may offer you short-term results but won’t help you in achieving long-lasting success.
Finding the right investor is something that requires a lot of thinking and of course, you need to take a lot of things into account before taking the next step. Below you will find ways to avoid bad choices and choose the right investor for you.
Choose someone who embraces your vision
Sometimes, finding an investor and imagining all the great things that you can achieve with this money, may make you take a fast and bad decision. Don’t let that happen. Present your goals, both short-term and long-term, and stand by them. If what you present is not what you will work on achieving, you can’t avoid the fact that in the future your investor may abandon you or accuse you of presenting false information.
Try to explain to them your strategy in simple words and try to make them feel comfortable investing in you. On the other hand, you also need to feel comfortable when the time comes for you to say yes to his offer. Make thorough research and ensure that your visions are on the same level.
Become acquainted with them
When a person that has the financial ability, decides to invest in someone, he has already invested in someone else in the past. He has dealt with both success and failure stories. Try to learn more for both cases, a failure can teach you more than a success.
If it’s possible, try to even contact companies that he invested in the past. You can learn more about his behavior and how he treated people, after a failure.
It’s not all about the money
When you try to find an investor, you are not looking just for money. What is more, needed for a new startup is the experience and guidance that can come along with an investor. An experienced growth partner can offer you many possibilities, such as an experienced HR partner.
But never forget that there is always a risk in these actions, so a lawyer is necessary to make the right contracts and keep all these in written proof.
Be honest and true
To build trust, try not to hide any important information from your partner. Even if you have made terrible mistakes in the past, be brave and let them know about your weaknesses. If they find out on their own in the future, it will be much worse and you will lose their trust forever. No matter how desperately you need this money, don’t build a relationship on lies.
Have faith in your vision and what you want to achieve, be organized and honest and the right investor will come your way.