The growth of the entrepreneur:


3 min read

The growth of the entrepreneur:

A thought that may go through every entrepreneur's mind when faced with a round of investment is the fear of losing control over their project.

All we should know is that it is inevitable to lose a part of society as more investors join the success of your company. But that does not have to mean that you lose the power of decision you have over it as long as you, the founding partner or partners, subscribe to that capital increase.

No matter how many rounds the entrepreneur has to go through, it is important to know that even if your percentage is reduced, you are increasing the value and potential of the company. As long as this loss does not occur too drastically. It will always be better to be part, to a greater or lesser extent, of a highly successful project, than to be the majority owner of one with an uncertain future.

You should never lose focus on what is most important to your company: increasing its total value. It will be the investors who, encouraged by the results, will give you more stock options with which to stay ahead.

If that fear persists when thinking about the possibility of losing your company, these are some strategies that you can follow:

  • Search calmly: To come to the negotiation properly it is important to anticipate. Be well informed months in advance about investors to avoid scaring them away with a fearful attitude.

  • Participate in the rounds: Come to the rounds with some capital, either part of your savings or through a loan. All to maintain your position of strength on the council.

  • Pick the right time: If you are looking for money without a worthy plan for the company, it is better to delay it and not risk wasting money. Wait to receive larger amounts of money later when you are ready to manage it.

  • Divide your needs: By the previous point, you must follow a business plan and a financing strategy that supports it from day one. By knowing the cost of each step you intend to take, you will be able to progress from smaller rounds to more significant ones as you achieve better metrics.

  • Do not accept abusive clauses: Since you accept an investor you begin to "dilute yourself" (lose influence over your company). Instead, look for someone who adds value to your company, not just capital.

  • Have more than one investor: this will help you have fewer obligations to them and maintain your ownership. It is advisable to link them through a company or group.

  • Look for alternative sources: There are less demanding ways such as crowdfunding where you obtain financing for the first phases in exchange for the product. Or Crowdlending (loans between individuals).

  • Partners are better than investors: Especially at the beginning of the adventure, it is advisable to leave the most crucial day-to-day functions in the hands of someone you trust. By this, I mean that as much as possible, we encourage you to find people who are actively part of the project. People who contribute with work and knowledge by making them investors of a small part in exchange for a benefit. In this way, you will not have the eyes of the investor pressing you, but a committed team that will fight for the company.

  • Seek stability: Finally, what you must achieve is to finance yourself mainly through your clients. Slow but sure growth is always better than a hasty one that you can't catch up with.

If you found it interesting, I invite you to take a look at our next article about some clauses that you could find in negotiation situations.

Fidestamp Editorial Team.

Image by mhouge - Pixabay

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