3 Reasons Why You DON'T Want Outside Investors in Your Business




Are you a new entrepreneur? Have you already avoided (or worked through) seven of the biggest mistakes entrepreneurs make? Whether you’ve crossed the line into financial stability with your business or you’re still struggling to get it off the ground, you may be wondering if bringing on outside investors is a good idea. After all, it takes money to make money, right? And investors, by definition, have money to inject into your business to stimulate growth. However, there are plenty of reasons why bootstrapping it from the get-go is a better plan than considering outside investors. Here are the three most important:

1. Your Baby Remains Your Baby

Did you start a business so you could answer to someone else? I didn’t think so. When you bring in outside investors, you’re basically turning the reins over to someone else. Yes, you’ll still be involved, but you won’t be the head honcho. If your investors decide they want the company to go in a different direction or don’t agree with your vision, they’ll make changes (or trouble.) Basically, you’ll be back to where you were before you become an entrepreneur: working for someone else. And if you really want to work for someone else, you can just go get a job at a big company for more money and less stress. Your business is your baby and that’s the way it should stay.

2. Decision-Making is Done by You

Once you learn how to handle the business side of your business, you don’t need others telling you which decisions to make. When you have outside investors, decision-making is done by the committee. Depending on how hands-on your investors are, this could mean endless meetings, wasted time, and decisions that you don’t necessarily approve of. The way small businesses stay dynamic is by making quick decisions by a person who lives and breathes the vision and goals of the business. That person is you. While investors may help you grow, they’ll also take away the essence of what your business is meant to be.

3. You Can Stay Nimble

Getting your finances in order and taking the next steps toward growth takes flexibility. When you have to check in with investors, have committee meetings to make decisions, and worry about making others happy, you simply can’t stay nimble enough to adapt to your business’s (and the industry’s) rapidly changing needs. Growing a small business takes risk, quick decision-making, and the ability to jump on new opportunities as soon as they arise. When you bring in investors, you’re turning your small business into something it’s not—a corporation. What you gain in capital is not worth what you give up.

Think of all the reasons why you decided to go out on your own and start a business. At the top of that list was very likely the reason of being your own boss and creating something you could be proud of. If you’re ready to build your business for you instead of investors, take our Money Mastery course for step-by-step instructions!