Why You Shouldn't Pick Just Anyone As An Investor In Your Business

With the plethora of business management strategies out there, it is vital for entrepreneurs and investors to be on the same page regarding their business. A clear vision and strategy is indispensable for a business to survive. 

Choosing the right investor, therefore, is a balancing act. An entrepreneur needs to ensure they choose an investor with the right mix of favourable qualities; sufficient capital, belief in the vision, industry expertise amongst others.

It is also important for small business owners and entrepreneurs to take into consideration how much stake they are willing to give out in exchange for funding. If an investor gains a controlling stake (51%) in a company, they in effect, control how money is spent and how the business is run, meaning that the business owner is ceding ownership to the investor.

Even before one is ready to take on investors for their business, it is advisable to have built a strong network which you can leverage off of. By taking the time and effort to prepare beforehand, a larger pool of potential investors and advisers is guaranteed. 

While top shot Shark Tank multimillion-dollar investors may seem like the perfect candidates to invest in your business, oftentimes, your first investors would be friends and family. They are far more likely to believe and invest in your business. 

Always think of investors as partners, rather than just money. You need to evaluate if you will be able to work long-term and if such a partnership will be beneficial to the growth of your business.

In addition, you can turn to mentors for advice during your journey. In fact, they may be more helpful in the early stage of your business. They can offer personal advice and steps you can take to grow your business.

Crowdfunding platforms such as Kickstarter also offer an alternative way to raise capital, however, they may not be suitable for every type of business. Crowdfunding is a very specific art, and only a few people have mastery of it. Any project has to have significant media attention to have any hope of being successful.

Having to spend time arguing with investors, and potential bankruptcy or loss of your business amongst others, are all reasons why you should be very careful when deciding to pick an investor.