When it comes to starting a business, you might be considering getting investors to help fund the build and operations of your business. If that’s the case, you’re probably thinking of the pros and cons of investors for your business.
Deciding to take on investors is a big decision, so here are a few things you might want to think about:
Investor Pro: They Contribute Money
Starting a business costs money. This is a fact that should not surprise anyone, but sometimes during that ideas and dreams phase, that notion can get away from us. And when it comes to actually finding the money, we can be a bit lost.
When it comes to evaluating the pros and cons of investors for your business, the biggest draw for getting them is the fact that they provide funds for your business. Funds that you could probably really use to get your business off the ground.
Money from investors can add real value to your business when it comes to being able to purchase services like marketing and growing your brand, improving your tools and investing in better software, paying for rent, hiring someone — investor money can really help you out!
Investor Con: The Money They Contribute Isn’t Free
While investors contributing money is definitely the biggest pro when it comes to deciding whether you want to get investors or not, the money they contribute does come at a cost. This should surprise no one, but it’s definitely a point that needs to be discussed.
While having investors isn’t the same as borrowing money from the bank, you still owe them money in the end (perhaps by way of shares, yearly payouts, etc.). Getting investors means allowing them to buy ownership and equity in your company.
Investor Pro: Contribute Ideas
Two heads are better than one, right? When evaluating the pros and cons of investors for your business, one of the great pros is that investors can bring ideas to the table. Ideas that can really help your business!
Not only can they bring ideas to the table, they can also bring some seriously valuable influence and experience. This is especially the case when you get investors with industry clout who have made significant contributions to the industry you’re trying to operate in.
Investor ideas can help your business grows in ways that you’d never imagined or simply thought about due to their different experience and outlook on business and the industry.
Investor contributed ideas can definitely be a serious pro when it comes to considering the pros and cons of investors for your business.
Investor Con: You Might Not Agree
While some of the added ideas might be great, there’s always the possibility that you might not appreciate, like or want their ideas. And when they’re investors, that can be a bit of a challenge.
When you’re evaluating the pros and cons of investors for your business, it’s important to acknowledge that getting investors on board means sharing your business. That includes opening it up to opinions and ideas that you might not agree with, but your investors are also risking something so chances are they’ll want a say.
Understanding the Pros and Cons of Investors for Your Business
Getting investors for your business is a huge decision to be made. And there are definitely pros and cons when it comes to what investors mean for your business.
Regardless of what decision you make, you need to make the best decision for you and your business!
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Tae started out as a journalist before following the money into the corporate world. But it turns out that the grass isn’t always greener and now you can find her spending most of her time writing about all the things she loves. Namely, money, travel and business with a hefty dose of self-deprecating humor. She is a podcast fanatic, blogging aficionado and loves to find new ways to turn passions into cold hard cash!