Love the instincts and wisdom you entrepreneurs demonstrated in the “Show Me the Money!” blog challenge!
There are two really important principles to remember when seeking funding for your business.
1. Make sure you have an ‘alignment of interests.’ This is when you and the provider of the money have similar goals for the investment. For example, you would have the same timeframe in mind for return of the capital. Or you could have the same long term vision for your business plan. If either of these (timing/vision) are out of sync, you may have just received funding for one of the biggest headaches of your life.
2. Practice the ‘Goldilocks Approach’ to funding. Basically, this strategy (illuminated in our book extensively) helps you identify how much money you need, when you need it, and who’s the best party to get it from. Any time you get the wrong funding, you risk getting burned or having a bad taste in your mouth.
We say it’s always better to say no to money that isn’t a good fit because ultimately it can ruin the business you’ve always dreamed of starting up.
Trust your instincts. Get references. Explore ALL of your options. And accept funding only if it’s ‘just right.’