Top Questions to Ask an Outside Investor
Getting money from an outside investor can be great for your business; but over time, if you have a fearful, intrusive, or controlling investor, you may soon regret being involved. And there usually isn’t an easy way out.
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Getting money from an outside investor can be great for your business; but over time, if you have a fearful, intrusive, or controlling investor, you may soon regret being involved. And there usually isn’t an easy way out. You want to spend as much time as you can getting to know your potential investors. To help clarify whether a particular investor is a good fit for you, use these questions.
- Why are you investing in this business?
- What aspect of this business is most appealing to you?
- What other businesses have you invested in before?
- May I call some entrepreneurs you’ve invested with before?
- How soon do you expect to see a return on this investment?
- How would it affect you if you were to lose the money you’re investing?
- If you felt I wasn’t capable of building this company to the stage you’d like, what would you do?
- How do you see decisions being made? By whom?
- What role do you want, if any, in the company (e.g., board membership)?
- Do you understand all the risks in making this investment?
Source: Rhonda Abrams is a nationally syndicated columnist, popular speaker, and bestselling author of books for entrepreneurs. You can register for Rhonda’s free business tips newsletter at planningshop.com. Contact her at 555 Bryant Street, No. 180, Palo Alto, CA 94301; 650-289-9120.
