Are you a driver?
If you’re not, I’ll tell you something that drives many drivers crazy! But if you are a driver, I think you can relate to this…
Have you ever given someone a lift in YOUR car and throughout the whole journey, they constantly give you tips and instructions on how to drive YOUR car?
Turn here. Move to the left. You’re on the wrong gear… GRRRRRRR!!!
I see this as invasion of my personal space. No, it might not be physical personal space per se, but it still is MY personal space. My personal-driving-space.
This, my fellow business owners, is the feeling you get when you have been running your business since the beginning of time and now that you have have an investor on board, you find yourself accountable to them. It feels like an invasion of your personal space. Your personal-business-space.
The investors want to know why you did this and that. They want to know exactly how much you pay yourself. They want you to account for every single penny. Something that you have never had to do!
Admittedly, a time will come in your business journey when you will need some cash injection in order to accelerate your growth. Unless you’re able to do this organically, bringing on investors is the most common way of getting this cash injection, but it comes with strings attached.
Before accepting investment, think about how your business will be impacted in terms of the following:
1) Ownership – How important is it for you to own 100% of your business? Do you mind sharing? How much are you willing to part with?
2) Control / Authority – What kind of shares are you giving up? Are they controlling shares? Do you mind sharing control in your business? Who is the ultimate decider after investment?
3) Influence – what influence does the investor have over your business? You might have 100% ownership, but if you owe a big loan to the investor, they may be the ones calling the shots. Are you ok with this?
This is by no way an exhaustive list. But it is a great starting point.
Like many relationships, you don’t know how things will ACTUALLY be until you are in the relationship. However, I hope that the above 3 points will help you reflect on what you want from this relationship with your investors, and therefore manage your expectations right from the start.
At the end of the day, the question is, are you ready to be accountable to someone else? Are you ready for someone to question how you drive YOUR business and invade in your personal-business-space?
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