Raising Money Posted on

Avoiding Controlling Investors

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Investors should have some power, of course, but they should not be power-hungry.

The relationship between entrepreneurs and investors has to be strong in order for the company to grow smoothly. If you choose the wrong investors – investors who keep looking for opportunities to exercise their power and to control you – you will be in trouble. Most startups face this problem because they can’t distinguish between right and wrong while establishing the relationship. The venture capitalist then exerts power and tries controlling them, causing plenty of problems.

Surely you can’t afford to make the same mistakes. Nullify the risk by following these three steps:

Choose Someone who is Humble

When you start your search, include humility in your search criteria. Someone who is gentle and supportive should be your target. The best investors will stick by you even when times are uncertain. They will always be there to support you and to let you know that you can do it. They will not discourage you in any way.

Establish Terms Beforehand

Make it a point to take about supervision even before you seal the deal. Capital should not be the reason why your investors boss over you and define your milestones and your decisions. When you make it clear earlier about supervision and guidance you will be able to establish a relationship and also get along for a long time without problems.

Change your Perspective

Investors can get harsh at times and you may feel like revolting. You may also feel discouraged by the feedback. However, you should keep reminding yourself that the investors wants only good things for you. The investor wants your company to do well. Whatever he says is because he wants your company to go forward and not stumble. Change your perspective and perception of his views positively so that you are encouraged to do well and to improve where the need arises.

Beware while making this decision because it is not an easy decision nor is it something that you should take lightly. This decision could in fact make or break your business. Be smart and deliberate while choosing so that you make the best choice.

Entrepreneurial Learning

Choosing the right investor for your company is imperative for business growth and success. Many a company has crumpled because of a wrong choice and because the investor is too controlling. Make sure you don’t repeat the same mistake and end up establishing a relationship with someone who wants to boss over you and make all your decisions for you.

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