That’s the million-dollar question for many entrepreneurs. For Part Five of the Experience Talks series, our Wednesday panel discussed the risks and rewards that each path has to offer.
As entrepreneurs who have “been there, done that,” the six panelists shared what they’ve learned from the investing game – as well as the perks (and pitfalls) of going it alone.
- Jack Studer (Lamp Post Group): “Professional investments are absolutely not for everyone. Frankly, if you can get to the finish line without it, I highly recommend it.” The second you accept an investor’s money, you’ve got a boss. And for a lot entrepreneurs, that’s the one thing they don’t want. Once you take on investors, your responsibilities to them become a top priority – because they’re not doing charity work. In fact, most of them worked pretty hard to make the money they’re now investing in you, so you need to be prepared to work even harder.
- Charlie Brock (Executive Entrepreneur, CO.LAB): “When you bootstrap, you run the risk of someone else growing faster, getting more market share and cutting out long-term opportunities.” Working with investors may come with constraints, but on the flip side, investors can help you grow – and fast. There are many kinds of funding available, so it’s likely that (with a little research), you can find an arrangement that works for your business. And once you do, be sure you choose an investor whom you’re excited to work with.
- TJ Gentle (Smart Furniture): “Investors are looking for a reason not to invest. And your job is to convince them why they should.” Before you approach anyone with a pitch, make sure you have a solid business plan backed by sound logic. For investors, it all comes down to numbers. You might love your business idea like it’s your own child, but for the investors, it’s purely financial. Take the magic out of it for them and create some certainty where you can.
- Ward Crimmins (President, The Crimmins Group): “When it comes down to asking family for money, even if you’re not really intending to, you’re taking advantage of a relationship.” It’s not rare for entrepreneurs to borrow from their families, especially in the early stages. But mixing business with family doesn’t always go well (to put it mildly). If you want to prevent disaster down the line, don’t set up an open-ended deal. Show relatives the end game, and cash them out when you say you’re going to.
- Sam Smartt, Jr. (Dealer Principal, Kenco Toyota-Lift): “Under-promise and over-deliver. If you do that, you can avoid a lot of the pitfalls.” Whether you’re borrowing from investors, family or friends, don’t make promises you can’t keep. Sure, you want to set the bar high. But don’t miss the benchmarks that you’ve laid out from the beginning; it’s hard to play catch-up.
- Adam Boeselager (Co-Founder and Director of Operations, Southtree.com): “There are tons of options on the table. You can get really creative.” Every business is unique, and what works for one might spell disaster for another. Know your company, know your industry and most importantly, know your personal and corporate goals.
Join us at the Camp House October 17 for Part Six of the Experience Talks series, Banking Benefits Beyond Loans. To register, click here.