You have a great business concept and decided to start your business BUT you find yourself in dire need of funding. The best thing to do is to hook that potential investor you were chatting up and get the cash, right? WRONG! This decision has serious implications. First, any investor at minimum will want input and in a lot of cases formal approval in every move you make. This can present hurdles with your daily operations as you grow. So, you’ll just shut them out, right? After all, this is YOUR brainchild- your business. WRONG AGAIN! If you try to go this route, you may find yourself defending a lawsuit brought against you by this investor.
We have heard far too many times about start-ups desperate for cash forking over a chunk of equity to bank roll operations or receiving some sort of “essential” service for the business and offering up equity in return. This is horrible mistake to make without being fully informed and making sure you have the appropriate protections in any agreements you are asked to sign. Take your time, do your research, fully vet your potential investors, seek professional advice and THEN make the decision that’s best for you and your business. Questions? Concerns? Contact us today!!
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