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Getting investment if you are a Virgin

Okay not an actual virgin but we are a private held company and have stayed away from investment and debt. However, we are key people dependent and every time we onboard new customers we have stop selling. We don't even have time to write a IM (well a good one). So I have two questions. 1st. Should our first lot of investment be small and then go for larger investment later or go all in? 2nd. I feel uncomfortable with a public listing for investment money. It seems a bit exposing and losing control of the negotiating before we've even stated (plus we are private people who feel weary of airing our linen.) btw I don't mine you republishing the question of I / we can stay anonymous. Cheers, D

1 Answer

Hi David, good question! The answer is a matter of personal preference and subject to your constraints of course. The desired outcome for most when raising capital is to grow the business disproportionately more than the dilution you suffer from giving away equity. This is called 'accretion'. Where the preferences come in are mainly around being held accountable to outside investors - this is the case in both private and public markets. The constraints are mainly around your ability to attract enough capital to do what you need and grow the business. If your happy with outside investors and want to grow then go for it. But be aware raising equity or debt will magnify what's going on in your business now - make sure you have a solid use for any investment you take and consider not taking anything if you don't get what you need.

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