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Will Investors Put Money Into a Small Service Company? NO.

Photo by charlesdeluvio on Unsplash

Many investors and startups and solopreneurs are asking me — will or should the investors put money into a predominantly services company or a one-person shop? Examples of these businesses are solo creative practitioners (photographers, small studios, small digital agencies with single owners, freelance developers, fashion designers with relatively unknown brands, and others of that ilk).

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Our quick answer is basically no.

VCs, Private Equity firms, and even well-educated and more sophisticated Family Offices primarily invest in C-Corps and S-Corps (in the USA) in exchange for equity (ownership), seeking an eventual exit. There is an expectation that there will be an exit with an attractive ROI — be it an acquisition, a merger, or a sale.

These investments are made with the expectation that there is a product (or a platform, or a marketplace), a team that will carry the strategy and tactics forward, some innovation or technology, and a marketing and sales engine to propel and scale this company forward.

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Pauline Sushko

Pauline Sushko

Head of Creative, UI/UX Designer

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