When a business needs more capital to startup or expand, there can seemingly be an overwhelming number of options available. It’s important to decide early on who you will trust to make an investment in your business. Do the values of the investors align with your business? Is their vision of your company the same as yours? Is the investor behind the funding more interested in profit than the growth and expansion of your business? Perhaps most importantly, does the investor see your company as a risky investment? All these questions must be considered when choosing a trusted partner or entering the venture capital market because choosing the wrong partner or investor for your business can prove to be a challenge down the road.
The wrong partner can be the kiss of death for a business, but it doesn’t have to be. There are ways to pivot that you can consider:
- Sell Your Equity and move on: We know it might sound extreme, but if you’re like many of the entrepreneurs we have worked with, you’re full of great products, ideas, or services. If you can cut your losses after having difficulty with a private equity investor, sell your share and start something new.
- Negotiate to purchase equity from your partner: Perhaps you started your business, like many people, with a close friend or member of your family. Have things started to sour over the years? Is the operation of the business negatively impacting your relationship? Worse yet, is the relationship negatively impacting the operation of your business? It may be time to cut ties, or at the very least, establish a situation where you and your partner do not have equal equity. If you don’t want to purchase all of their equity, try working out a “silent partner” deal that might allow them to continue to see profits from the business but take a step back.
- Research your situation and pursue new funding: We have great resources here on our website. We suggest checking out “Tips For Choosing The Right Investment Partner” right now for tips on all of the different types of capital investments that you can pursue.
Scandia Partners is unique and we are proud of it. We have the ability to invest in people and businesses we believe in. With our expertise and knack for finding and growing successful businesses, we are looking for partners and potential partners who seek peace of mind. You can have peace of mind knowing that, with an investment from Scandia Partners, we believe in you and you are part of the Scandia family.