Thursday, April 24, 2008

Do I need to put my own money in to my startup?

You almost always have to.

If you don't put up a significant part of your personal networth in the business, no one else will invest.

If you won't bet the farm on the idea, no one else will.

But once started, you don't need to do it all yourself.

But investors, and even bankers, want to see substantial personal commitment by the founder at the seed and start up stage.

With your own money, you show the world you believe.

With your own money, keep the equity yours and you keep control.

But to grow fast, eventually you will need outside capital. When that time comes, don't be too greedy about control and ownership. It is better to own 50% of something worth $50m than 100% of something worth $5m.

visit my other blog for more ideas: tomthemoneyman.wordpress.com
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