Monday, February 20, 2012

When to approach for investment

I got a great business idea. What next. Should I execute it from  savings and then reach investors, or should convince investors first and then start working on it.
Many  time I am being asked the same question by many entrepreneurs, so I thought to share it with all to have an open discussion.
This is a question which almost every entrepreneur has. Even successful CEOs while starting some new business initiative ask this question to themselves and answer is not that simple in black and white.
You can scrutinize your situation in following ways and take the right decision.
If you are 200% sure about the success and investment in time and money both is not much,
you can try from your saving.  If time to success is much then even if money required is not much you should look for angel investor to cushion any unseen circumstance, which might occur during the bootstrap  period.
If you are only 100% sure about your idea then you should look for investor first. It validates your idea, when you go through the questions being asked by investor then you think more and clarify more to your self.
Some time entrepreneurs  approach  many investors without any result and ultimately try on its own. Most of the time in such situation they struggle a lot and many time fail as well. Reason is investors are experienced people and they had already realized it is not going to work hence ultimately it didn’t. So always share your thoughts with investors and try to find what do they think about idea or concept. If many of investors are not taking interest in your idea it is a good indication that you need to think again on your idea rather than directly starting on your own.

If you are already running a successful business as CEO or MD and just looking forward to start new business unit which is not a part of your expansion plan but a completely new business for you, you should again go back and look for investor. It allows you not to disturb the existing business growth.
Partners or investors help you in seeing the situation from different angles. You get add up experience.
Some time partnerships get broken or investor exits which creates problems. Still it is worth to take risk if you compare it with all your saving got drained in an unsuccessful attempt. You should choose your partner or investor very carefully instead.
I hope it will help you. For more elaborated discussion on your specific situation you can always reach me on

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