The Cons and Pros of raising the capital
The opportunity to raise external money may be tempting; however, before entering this train, founders of a startup have to understand the cons and pros of raising the capital.
Let’s start with examples of the positive factors (Pros):
- extra money will help you to speed up the journey and results of a startup;
- high available budget can be used to develop and improve the quality of your product or service and thus to increase the chances of success;
- very often investment comes with the influential people, contacts behind; you will definitely feel the positive impact of this as more doors will be open for you;
- the journey of raising the capital (especially successfully doing this) will help to build your brand and benefits of being known and recognized in the business world.
The dark side (cons) of raising the capital:
- the process will ask a lot of time and some money (everything costs);
- investors’ money comes together with the loss of full control of the startup; you will have to compromise and sometimes it means detouring from your own plans;
- you will have less of the startups’ profit as you will have to share it with the investors;
- it might be difficult to feel the constant burden owing to others;
- big money brings a danger of conflicts among the co-founders and sometimes this can lead to the termination of the relationships.
Why and when to look for the investments?
There are different stages of startup lifecycle, when company grows from the idea/concept stage through the launching and up to the maturity stage. All these stages require investments of a certain scale.
To learn more about Growth Capital, and the opportunities that exist, contact me at Joshco Partners for a free consultation.