Most stories we read today about beginning small companies tell us to try to find an investor (or partner) who can help us by investing some money in our enterprise. I don’t agree.
My best advice would be to tell you to not find a partner of any kind when you are just starting your business, especially if you are a small entrepreneur. It’s hard to get going and stay moving forward when you constantly have to ask someone else’s opinion on every decision. My experience has been that taking a partner will cause you trouble in the long run.
I will tell you though, to find all kinds of talent to help you do what you do and to find people with many different skills to help your business grow – then either hire them as employees or as consultants when you need them.
Some people will try to get you to join forces with them and use their help and talent to push forward your business for a share of it; but I still advise you not to join forces, or share in revenues, but continue to use consultants who will not earn any ownership in your company. I think that since you had the courage to start your own business you should continue believing in yourself and your idea and keep your original goal in sight.
In almost every business I’ve seen where people become partners, they eventually have different ideas about how the business should be run, or one person will lose sight of the mission, or there will be creative differences or personality conflicts. These all drain your resources and can damage your business. Don’t relent or believe anyone can be better at your business than you can.
If the person who wants to be an owner with you had the kind of personal strength to be useful to you, I think he or she would have started his or her own company and is simply looking to capitalize on a good opportunity without making the personal investment you have made.
This is not to say that you would not accept money from investors as minor stockholders. This can get complicated because you need to keep your position of power without diluting the value of your company. The best kinds of stockholders are those who are “silent” investors. They like your idea and have extra money to invest but are not interested in getting involved in the day-to-day operations of your company.
I think it’s important for you to stay in control of your company and the decisions you make. If you have stockholders (partners?) who question each decision you make, and sometimes want to talk you into changing or modifying those decisions, then soon you will no longer be running the company, just participating in the decisions.
I believe if you do have stockholders it is fair to keep them abreast of the activities of the business and you certainly can ask for their opinions and expertise but always retain the right to make the final decisions yourself!
Article – Copyright 2000 Stanley I. Mason. Syndicated by ParadigmTSA