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Chapter 1: Capital Formation Strategies ... > Consider Staged Investment - Pg. 13

Capital-Formation Strategies and Trends 13 · · · · · Forgetting that timing is everything. Don't raise money at the last minute. It will already be too late, and the cost of desperation is very high. The best time to raise money is when you can afford to be patient. Being so afraid of sharing your idea that you don't tell anyone about it. You can't sell if you don't tell. Being price wise and investor foolish. It's not just about getting the best financial deal, it's also about learning what other strategic benefits the investor brings to the table. Not recognizing that valuation of small companies is an art, not a sci- ence. Be ready to negotiate as best you can, depending on your nego- tiating leverage. Believing that ownership equals control. An investor can have 10 per- cent of the ownership and 90 percent of the control (or vice versa), depending on how the deal is negotiated and structured. How Much Money Do You Really Need? One mistake that entrepreneurs often make in their search for capital is to raise