Do You Really Need an Investor?
Posted on February 4, 2019 Business
In the present day, plenty of people have brilliant ideas regarding startup, and hence desire to begin their own startups. But the mere desire is not enough. Proper planning is a primary requirement for beginners. For example, a foolproof plan is required to avail resources for the startup. Nowadays, easily available loans are funds may appear to be a good solution to this problem. Yet, this easy method is not always the best one. In certain cases, self-funding may prove to be more beneficial for startups. So let us take a look at why funding can sometimes be a pain in your company’s life and why self-funding (bootstrapping) is the best.
You become the Best Version Of Yourself
The very first notable advantage of self-funding is the progress of the startup that occurs due to the owner’s ambitions and attempts to earn faster. Due to the lack of availability of huge capital as a back-up, he has to rely entirely on his petty amount of savings and earnings. As a result, the primary target is set to enhance the profits and income in the most efficient way. Resulting in more productive, result-oriented approach and execution.
Save more time for Execution
Having an Investor in the organisation means you cannot do just anything. For every big decision, you need approval from the Board and that includes Investors. A lot of time is saved as one does not have to spend hours in meeting and requesting investors, or in carrying out the formalities and procedures necessary for availing funds. Instead, the saved time can be employed in improving the services and satisfying the customers and users, for the betterment of the startup.
You Answer to Yourself
The best part, perhaps, is the fact that the owner does not have to provide any clarifications to anyone regarding the startup policies which he adopts. Whenever a loan is obtained from any source, the investors seem to get totally involved in the startup matters, and the owner stands answerable to them regarding all measures taken up for the startup. Thus, funding can really be a huge problem.
Your Goals do not change
A normal entrepreneur may have simple goals regarding his startup, and be content with a certain level of profit that is enough to meet his requirements. But, whenever the investors get involved, they always want and coax growth in the startup, an increase in profits, without caring whether the excess growth will prove beneficial or harmful. A Classic example of such transformations is OYO Rooms, Snapdeal, Flipkart, Ebay. Some of these benefitted from those transformations but it doesn’t always work that way. Plus it definitely changes the soul of your Startup
Also read: 7 Useful Startup Advice from Experienced Entrepreneurs
Make Your Own Rules
Whenever one begins a self-funded startup, he works with the motive to grow more and also learns to value money. In addition to that, he gets the opportunity to carry out experiments with his startup. As a result, he is able to explore his interests and enhance his skills all the more. But investors do not encourage any sort of experiment, due to the risks involved, which they do not want to pay for. They want the entrepreneur to be absorbed entirely in profit and money-making, rather than trying new techniques and technologies.
Bottom line:
Thus, it is evident that one should avoid involving investors at the beginner’s level. Anyway, one may not always feel prepared to take up the entire starting of the startup all by himself. Such attempts should only be made when one is ready for the startup technically, physically, mentally, as well as economically. Investors may be involved at a later stage in the start-up when the owner is in a position to take an upper hand over them, and run the deal as per his own desire so that their interference does not prove to be a reason of botheration for him or his start-up.
If you still think you need an investor for your startup
Do read: Here’s All That You Wanted To Know About Angel Investors
Got any other thoughts? Feel free to leave in comments
Originally published at www.mashupcorner.com on February 3, 2019.
