Post
Topic
Board Economics
Re: Would you prefer getting a loan for a startup or getting an investor?
by
slapper
on 19/06/2024, 14:14:00 UTC
~snip~
Having an investor is not like doing a partnership. You may not understand, but if you borrow money from someone or someone else invests money in your business, then you set a profit limit in which you have to give the profit to your investor. Yes, if you have a partner in your profit, then he can interfere in your business and you can say that your business is in the hands of someone else. But if you have good investors, you only have to give benefits to your investors and not involve them in your business.

I think it is much better than borrowing to find good investors who keep giving them a fixed amount because debt is something that once a person takes, he can never get out of debt. If you borrow from someone and he stipulates that you have to pay interest on it, it can be more dangerous for you. I don't think his business can be more successful than if you have a good investor and you decide that they will have a profit in your business, then you give them that much money every month.
You're looking at this investor against debt situation as if it were some sort of cage match. Perhaps, though, debt isn't the devil you believe. convertible notes? It's like you perform as expected; it becomes equity. Use it wisely, debt can be the fuel for the rocket ship

Now, investors? Indeed, they write checks, but they're not only throwing money at you. They got expectations, man. They are looking for development and profits. That can mess with your headspace, just like any debt deal. Don't fool yourself; think of investor money as equivalent to complete independence. Their influence is there, brother, whether they got a board seat or not

The truth is that every route to money comes with guidelines of their own. Not a free lunch, but you have to choose the game you want to play