Why Investors Are No Good for Your Startup (and Vice Versa)

Investors

Getting people to invest may seem like the logical next step for your startup. But here are some very valid reasons by Tim Berry for why you shouldn’t seek investors’ help:

  1. It’s extremely difficult to get investment for your startup, especially if you don’t have previous startup experience.
  1. Getting investors involved in your company means that you don’t retain complete control over it anymore—essentially, you’re selling ownership.
  1. Similar to the previous point, you’ll no longer be your own boss and can’t make all the decisions yourself; what you do affects everybody.
  1. Valuation: if you watch Shark Tank or Dragons’ Den, you’ll understand why this critical element can sink your pitch.
  1. What’s the exit strategy? Remember that whether your business is successful or not means nothing to investors unless they’re getting their money back.
  1. If your startup isn’t truly scalable then you’re out of luck, because that’s one of the main factors that interests investors.
  1. Here’s another one that Dragons’ Den will teach you: your business idea needs to be unique… and patented. Otherwise it’s just too risky.
  1. Investors can become your greatest asset, but there’s also a chance that they could be your downfall. Like Tim says: “Some are trojan horses.”
  1. If your startup just doesn’t have what it takes, getting financed won’t be the solution to all your problems, nor your ticket to success.
  1. Raising a lot of venture capital is the surest way to lose control. Do you want investors to take your company away from you?

If you really need the money, though, there are some other ways to go about it:

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