It’s not uncommon for new businesses to seek investment capital. However, it’s possible that your Texas company may be able to survive without the help of an outside investor. There are many variables that you will need to consider before deciding if your firm needs an investor to meet its goals.
How much money do you need?
These days, you can start a business that operates online for less than $1,000. This may be true even if the company sells and ships physical products. If your startup costs are relatively low, you may be able to obtain the capital that you need by taking money out of a savings account or obtaining a business credit card. You may also be able to take cash out of a retirement account, sell assets or find other ways to fund your business without seeking outside investors.
Would your company benefit from taking on an investor?
The moment that someone agrees to put money into your business, you have a commitment to help them obtain a return on their investment. This may make it harder to achieve the vision that you currently have for the organization. For example, instead of donating the firm’s profits to charity, you may have to return it to your shareholder in the form of a dividend. A business law professional may be able to provide more insight into what it might mean to take an investor’s money.
Ideally, any investment agreement will be put into writing. This will typically make it easier to resolve any disputes that might arise as the company grows and evolves. It may also make it easier to determine how and when an investor can sell its stake in the company.
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