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Does my startup need an investor?

The mind of an entrepreneur is full of thoughts, conceptions, myths and misconceptions.  To make their enterprising idea a reality, entrepreneurs rely on venture capitalists and angel investors. Funding can clean up things and transform an idea into a reality. While funding can make or mar a potential business idea, it has to be kept in mind that a wave of funding is truly one of the many determining factors that help a startup to sustain. If one were to dig deep into the entrepreneurial world, one should not be astonished to unearth success stories of Amazon and Flipkart whose businesses grew out of a garage and a basement respectively.

Due to the back-breaking stress and nerve wracking entrepreneurial pressure, entrepreneurs are forgetting to question themselves -Does my startup need an investor?

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Here are a few points that answer the question- Does my startup need an investor?

  • If you wish to be the boss of your own business, stay away from external cash inflows. Angel investors and venture capitalists demand a stake in your startup. So, do not rely on them.
  • Not every potential entrepreneur is well versed with the art of being self-reliant. By being self-reliant, you learn to cultivate the virtue of handling tasks in an efficient manner. Tough decisions and unforeseen circumstances can be handled.
  • To ideate your startup, you require ample time. Rather than venturing and selling your idea to investors, it is best to wait for better things to happen. If you rely on investors, ‘ideating startup’ may seem gruesome and awful.
  • If you profoundly wish to transform yourself into a connoisseur of financial management, depending on family members and crowd-funding will serve the purpose. Embrace the notion-‘Minimum funding, maximum fame.’
  • A true entrepreneur should be answerable to himself and not to investors. By relying on investors, an entrepreneur becomes answerable to investors. As a consequence, he is forced to focus on revenue.
  • Fundraising is a laborious task. It eats away a lot of time. If you think you have ample time in your kitty, chalk out a feasible investor pitch that seems convincing enough. Many serial entrepreneurs opine that budding entrepreneurs should focus more on idea and less on funding initially.
  • However, if you run out of money to such an extent that your employees have been experiencing a pay cut, then you obviously require an investor.
  • Accost an investor only for the required amount. If your startup requires $1 million, try your best to raise funds through crowd-funding. Despite your best efforts, crowd-funding might not have yielded the required monetization. Go for an investor in this case.
  • If your startup is into capital-intensive niche segments such as e-commerce and hardware, funding becomes all the more important. So, do your best to raise funds. Have a balanced view of the monetary situation and take a wise decision.

Here is the bottom-line- If you think that the survival and sustenance of your startup depends on investor funding, go for it. However, be cautious as it may back-fire any moment.

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