At times people fail to analyze facts and take decisions that they regret for the rest of their life .
One such mistake is giving your equity share when it comes to business .
Don’t be one of them who end up losing equity and in turn, the profit for the rest of their life just to seek capital in return.
Here are some ways to prevent the same and favour your luck ...
USE MILESTONE RAISES TO PREVENT EXCESS DILUTION
Set up goals and milestones for your company and achieve them in the shortest time possible that too with quality so as to increase the value of your company and in turn you yourself. That’s when people or say investors trust you and do not demand much. Else in another case, they would give you the capital only when you present more equity.
So prevent your ownership dilution wisely.
USE BOOTSTRAPPING TECHNIQUES INSTEAD OF EXTERNAL CAPITAL
It’s not every time ,that entrepreneurs prefer lending money from banks, investors, capitalists etc.
You can increase profit and grow your business even without raising any appreciable amount. Also initially you can prefer using your credit cards, saving etc to grow and later use the amount received from customers to raise funds and enable development.
CREATE TRACTION BEFORE APPROACHING INVESTORS
Even before directly getting to the investor build up a traction of your business . And as you would have already proven your role and the presence of your business it would be easier and acceptable for you as well as the investors to negotiate over the share as the higher valuation you will have the fewer shares you will be left with to distribute amongst the various segments.
CONSIDER DEBT THAT REQUIRES NO EQUITY RELINQUISHMENT
Always remember that angel investors and venture capitalists are not the only means to get money from . Instead, you can lend the same from a family friend, bank , capitalists etc that would do the same without demanding any share or equity .
NEGOTIATE WITH INVESTORS
Never be satisfied with what your get . Present and implicate your terms well enough and don't just let go off a big share of equity that is not meant to be .Equity share is decided varied upon different cases so analyze negotiate and get the best deal done for you .
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