Find Hands-On Investors to Help Grow Your Startup
|From Blog Pics|
One thing I’ve learned while becoming an entrepreneur and looking for funding is that there are drastically different types of investors out there. Money is not just money. Yes, if you only have one option for capital (which can frequently be the case), then by all means take it (if you need it). But if you have any choice in the matter, there is a gigantic difference between passive investors and hands-on investors. I don’t mean that just in terms of how much time they spend looking at your business and helping you grow, but also whether or not they’re hands-on in your market.
If you’re a web company, for example, it’s great to have an investor who blogs, experiments with web services, loves the Internet, and is an active participant in your field. These “hands-on” investors can get you a lot farther than somebody who is only looking for a financial return and is indifferent about your market.
This is more applicable to early-stage companies, where the path is treacherous and a lot of work is done molding and building the business. For more established companies that need growth capital, it’s not as important where the money comes from as long as there aren’t too many strings attached. But if you’re an entrepreneur or an aspiring entrepreneur looking for cash, try to find a hands-on investor who knows and loves your market. It’ll make a big difference.