Michael Newman’s latest é-Wealth Daily’ article is titled “Consider Your Cash Options”. [‘e-Wealth Daily’Article]

Michael Newman’s latest ‘e-Wealth Daily’ article:

Consider Your Cash Options

There’s no way around it: if you’re going to start up a business, you’re going to need some cash to do it. Where you do have a choice, however, is how and where you come up with the cash to start the business that will hopefully lead you down the road to financial freedom.

Some people actively suggest going to outside sources to acquire capital, other than your own savings account, personal line of credit or securing a bank loan. Some of these investors may be family, angel investors or venture capitalists. Whatever they are, they may not be the best bet for you as you try to jumpstart a business from an idea into something real. The key to securing funding to grow a business is in what form you use, and what works best with your business aspirations.

You see, relying on others for the money you need to start up your business can sometimes end up causing harm to your business’ performance, especially in the early going. Even though going to investors to get quick-cash infusion to aid your startup may seem like a great idea, depending on the size and scope of your business, it can potentially leave you dealing with a few headaches.

Let’s be clear about something: money is money. However, the conditions attached to it can vary greatly depending on where it comes from, and what the expected results are.

When you have investors, they’re going to want to see returns. Otherwise, why would they invest? If you’re running around town trying to get everyone and their uncle to invest in your company, you’ll also be giving them the right to batter you with opinions on how to run the business and questions about when they will see a return on their investment. Do you really want to deal with that in addition to other stresses that surround starting up a company?

Sure, venture capitalists and angel investors may have a lot of money to throw at a startup; but don’t think for a second that it comes without strings attached. Oftentimes, angels want you to develop an exit strategy so they can make their money back — and then some — on the sale of your business. That is, if you can really still call it “your business.” You see, when you seek outside investment, you’ll be relinquishing your stake in the
company, no longer capable of making all the decisions for the direction you want to take your business. Of course, they’ll tell you they’re offering a helping hand, when in actuality they may snatch your business right from you.

When you go out and get a number of investors with a number of different goals and needs, there is a chance you may be biting off quite a bit more than you can chew. After all, just because you have all these investors and all this cash, does it really mean you need it? Now that’s not to say you don’t need money to start your business. However, it’s not like taking out a bank loan when you can just repay whatever it is you don’t use.
These investors will be looking for answers, and you can bet they’ll be disappointed when you come back to them with their money, saying you didn’t need it.

Using a loan, line of credit or your own personal finances to start a business makes sense. This is because it relieves some of the already added pressures you’ll be experiencing with a startup, and allows you the freedom to do what you want. Also, investors aren’t going anywhere. If your business begins to grow and you’d like to consider angels or other investors because it seems like the right fit, then go for it. It’s a better
idea, however, to wait and see how things are going before you start bringing more people into the equation.

e-Wealth Daily

About e-Wealth Daily

The e-Wealth Daily Bulletin brings you daily tips, advice and breaking news related to home businesses, small businesses and internet marketing. Our team of experts gives you the information you need to take your business pursuits to the most profitable level. Founded by Adrian Newman in 2003, the e-Wealth Daily Bulletin and www.ewealthdaily.com are a division of Lombardi Publishing with online newsletters reaching over 100,000 subscribers each month.

* IMNewsWatch would like to thank e-Wealth Daily for granting permission to reprint this article.

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