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  • Writer's pictureKorian Brady

Sourcing Cash

In the startup community, investors and angel investors are terms thrown around quite a bit. Very few businesses can scale at their maximum potential without help from an investor. This is not only due to the fact that they have money; however, these individuals have a wonderful network that could be more valuable than just dollars.

Not all money is good money. Like mentioned in Winning angels: the seven fundamentals of early-stage investing, picking the right money is key. For example, if you are an application seeking money verse if you have waste management startup company, the type of investor should differ depending on the industry.

Not only is choosing an investor important, being sophisticated on how much of your business you want to offer is very important. Different investor may have more leverage and ask for a greater percentage of your company. Some investors may rather extend a line of credit. The way this investment is structure could determine the future of your business.

Specially, in the app industry, which I am in, speed is key. It is common to hand over 20%-40% of your business in hopes to scale quickly. This may or may not be beneficial to the founding team. I believe the most important thing as a founder to kind in mind is dilution. As a founder you do not want to over barrow or give up too much of your company because as you grow there may be more opportunities to raise money or there may be important decisions to be made and you will want to have the ability to make discussions for your copy without being at the mercy of your investors completely.

Amis, D., & Stevenson, H. H. (2001). Winning angels: the seven fundamentals of early-stage investing. London: Financial Times Prentice Hall.

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