How can an investor be chosen from the readily available pool of global investors, who claim, are willing to help your business reach new heights, and help to realize the true potential? How do you decide that an investor really wants your business to succeed, and not just cash out at the opportune moment? Here’s a small guide to follow when looking for the right investor for a business:
Appearances can be Deceiving:
Don’t believe in appearances make the first impression sorts of advises when it comes to money. Every investor has their own agenda which they push through when it comes to funding of new businesses. Some try to get on board to gamble, some are there to regain a sum which they might have lost on a failed project, and some offer their insights to truly help the business to grow.
Checks on Dealers as Well:
Background checks should be carried outin great detail and the investor should not be formally appointed to head the business unless everything regarding the motives, past dealings, failures, strategies, long term goals, etc. is clarified. In fact, the bigger picture should be linked to the investor’s ulterior goal, which might be hazardous for the management of the business in the long run.
No Violations of Law:
Often people looking to hide their illegal stashes claim to be independent investors, and invest in businesses to get tax exemption, and bring that stash within the legal framework. These practices might bring law enforcement agencies right to the company’s doorsteps, who would love to frame the management team for tax evasion, money laundering and other federal charges. Eventually, the business will be ruined, and the founders and other partners would be left to ruins. In order to make sure this doesn’t happen, free background checks are mandatory before approaching any investor, no matter how much capital he/she pushes to park.
Check the Efficiency Claims:
Investors may also claim that their past businesses had returned mind boggling returns within matter of a few years, and lure budding businesses on their path to self-annihilation. However, websites offering free background checks have become a great tool for inexperienced business heads to look for inconsistencies in investor profile, and get rid of the people who raise serious red flags upon inspection. Every business head must make sure to dig really deep to investigate and if possible, visit the past businesses of the investors to get a clear, in-depth idea of the whole picture.
Never Allow the Investor to Dictate Terms:
Remember, the investor is in the game only to double, or even quadruple his fortunes. Besides, he might not have a single bit of knowledge regarding the product or service that the business deals in. merely parking the capital in a business doesn’t give anyone the legal rights to dictate terms, policies and design the management framework. If the investor is ill-informed, or turns out to be an arrogant captain at the helms of a ship adrift, it can lead to the sure past of destruction.