Angel investors are your partners. Remember those words because they’re going to have to be put on a sign over your desk in case you have trouble. When entrepreneurs finally make that leap into securing an angel investor, the thought that has escaped them during the entire process is, “Now I have another partner to help with the decisions and the running of the business!” You didn’t think it would be that simple, did you?
What many entrepreneurs can seem to forget is that people aren’t going to just give you money to go off and start a business on your own. They’re going to want a say in what’s happening, the decisions that are being made, and most likely even the stationary choice that you made. Thinking that this wasn’t going to be a logical outcome to hitting up every angel investor in town is a tad bit short-sighted. Let’s examine why.
You’ve got a great business idea, you’re confident you could get funding once being put before an investor, and you’re ready to present. These are all the factors in your corner that you thought were important to get the preparation for opening the doors in place, but you forgot what to say when the investors nod, shake your hands, and go, “when do we get started?” Wait, what’s this “we” nonsense? The “we” is that these people are sinking a large sum of their money into the prospective success of your venture and, frankly, not realizing that giving them a say while they have however much percentage of a share of the business is going to look a little unprofessional.
The first thing that’s going to have to happen is for you to try to figure out what that percentage will equal in your comfort level for sharing a commanding say in the business. Are you going to pick fights over things that you thought you were dead set on? Are you open to input at all for any directions the business should go? Do you respond to disapproval regarding your own plans? You have to make sure that these questions don’t make the hairs on your back stand up. If the thought of having to go head-to-head with some of these potential conflicts doesn’t sit well with you, you might want to rethink the concept of investment. You’re giving up a say in the business by asking people to put their money where your mouth is and that comes with strings that maybe you’re not ready for.
There is a bright side, though. By allowing these investors to take this percentage you’re getting the potential years of knowledge and experience that they have under their belt and the suggestions and guidance that can come along with that. Also, besides the money, the angel investors might even have suggestions for organizational solutions, marketing plans, and alternate revenue opportunities.
If you can break yourself into the idea of looking at investors as more than “free money without interest,” and a potential way to advance the business forward, then their suggestions and decisions won’t feel like they’re taking control of your dream.
