Startups: 6 Principles That Must Be Carefully Considered Before Seeking Equity Investment

P growth enterprises have embarked on the road of development and are in the best position to move forward. They already have available strategies and organizations and tools that can sustain their growth. They are more agile than those of Big Mac rivals, and also have more strategic opportunities than those with smaller or larger enterprises.

However, these growth enterprises are generally only medium scale, and their funds are limited.

So how they seize the opportunity to grow will be a problem.

The general principle is to use internal capital to develop in their own way.

This means that it is not to expand business in 10 new cities, but to restrict itself to a restricted area.

< /p >

< p > then, is it right to rely on existing cash flow to maintain enterprise growth? In most cases, such a choice is right, though it risks losing the profit growth.

But there are still some situations where you can use external resources to raise funds and increase the power for growth of your own business. Avondale management director and co founder KarlStark and BillStewart think there are 6 principles to consider before considering investing in equity: < /p >

< p > 1, you have verified your business mode, and make sure that this mode is obviously scalable. < /p >

< p > the most important factor in raising equity is owning a proven business model.

Without acknowledgement that your business model is able to bring business growth and repeat business models in many areas, it is successful not to be busy expanding business capital before it can be expanded.

< /p >

< p > 2, by giving up growth opportunities, you will lose the risk of your competitive advantage < /p >

< p > if you do not pursue enterprise growth, will competitors seize the opportunities that belong to you? If so, will your business have problems? Under such circumstances, you should choose other ways to catch up with those opportunities that can maintain your strategic advantage.

< /p >

< p > 3, if you do not give up control, you can add shares < /p >.

< p > increasing equity income means that you are selling some of your business.

Do new investors control enterprises? If so, you need to consider slow growth to maintain control.

< /p >

< p > 4, you < a href= "http://www.91se91.com/news/index_cj.asp" > the increase of shares < /a > has no excess effect on your company.

< p > any a href= "http://www.91se91.com/news/index_s.asp" > equity trading < /a > will bring huge cost to a company, including financial resources and time.

If this will distract your company from customers and markets, don't make such an effort.

< /p >

< p > 5, you can find "perfect" investor < /p >

< p > only a wealthy investor is not enough.

The right investors are those who share your goals and bring more value to the business.

< /p >

< p > 6, you have a simple and clear investment reason to enable investors to understand and believe < /p >.

"P", as an outsider, will you invest in this business? You must be able to express investment relations very clearly and describe how investors can get rewards in very rigorous logic.

< /p >

< p > KarlStark and BillStewart think that if your company meets at least 5 points, you can explore the opportunity of external investors to invest in equity.

Otherwise, the best option is to restrict the growth of enterprises and do some investments that can maintain your current a href= "http://www.91se91.com/business/" > business mode < /a >.

< /p >