Taking an investor for your business might seem like a good idea at first. I mean, it would save you thousands of dollars. However, this might not always be a good idea.
As an example, Tina McGonagill wanted to expand her food container business and she thought about getting an investor to do the job. Tina met the investor at a trade show and she was able to secure a $50,000 investment from him. Consequently, Tina gave Trent Lowenstein a 20% stake in Big Fat Lunch.
Reaching an agreement with the investor
However, the two weren’t in agreement when it came to the strategy that they will use to increase profits and that was one major problem for them. For instance, McGonagill wanted to order more stocks and hoped that Lowenstein would get the product into retail stores using his sales skills.
“Without stock, we have no business, because at the end of the day when you own a product your biggest priority is to get into retail,” she told CNBC’s “Money Court.”
Meanwhile, Lowenstein wanted to use social media and influencers to increase sales and with lower margins while increase profit on each product sold.
