The debate between the investor and the business owner emerged when the business was slowing down, but it teaches us why discussing these details is important ahead of including an investor in your business, said Michael Goldberg, executive director of the Veale Institute for Entrepreneurship at Case Western Reserve University.
“If you’re an entrepreneur managing a small business, dealing with investors and their input can be time-consuming and counterproductive,” he said.
When looking for an investor it’s important to discuss the stake they’ll have in your company as well as what decisions they can and cannot make. Even before you are ready to take on an investor for your small business, Goldberg suggests first building and maintaining a network. If you engage with people before you have an ask, it sets the stage for when you are ready.
“Oftentimes, early investors come from friends and family,” he said. “It is also folks that you know through your high school, through your university, your business school, or professional associations.”
