Important Words of Warning

Chapter 22: Getting Financed - Page 22.6

Important Words of Warning

Don't take private placement, angels, and friends and family as good sources of investment capital just because they are described here or taken seriously in some other source of information. Some investors are a good source of capital, and some aren't. These less established sources of investment may be necessary, but they should be handled with extreme caution.

Never, NEVER spend somebody else's money without first doing the legal work properly. Have the papers done by professionals, and make sure they're signed.

Never, NEVER spend money that has been promised but not delivered. It is amazing how often companies get investment commitments, contract for expenses, and then when the investment falls through, find themselves left in the lurch.

Be very careful about turning to friends and family for investment. The worst possible time to not have the support of friends and family is when your business is in trouble. When the business is financed by friends and family, you risk losing friends, family, and your business at the same time. I know an entrepreneur who stuck with a losing business for six years longer than he should have, because he started it with money from friends and family.

[Home] [Buy this Book] [Links] [About the Author] [About this Site] [Site Map] [Contact]