Topic: Would you prefer getting a loan for a startup or getting an investor? - page 2. (Read 839 times)

Of course having a contract is a must.You should never do any business with anybody if there is no possible contract, that way everything will put into legality with the presence of a licensed attorney.

Now investors are actually greedy since it’s their money that are being risked in the first place. However, your responsibility here is to act as a business partner, so that you can ensure that everything in your business idea is followed so that the success will be certain, unless if the investor itself will find his own way on achieving the business’ success.

I'll choose to get an investor because I don't yet have experience running a profitable business with positive cash flow. By finding an investor, I must prepare a pitch deck, which forces me to continuously improve and verify my ideas. I also learn how to convince investors. This is a very good experience. So, besides getting a cash injection , I can learn more about the potential of my ideas because I need to convince investors by answering their concerns.

It depends on the contract. If you can find an investor that isn’t greedy, then that’s a great option because investors are usually better than loans. When you have an investor, if anything goes wrong, it’s his money that goes, you’re not held responsible as he knew the risk. If you take a loan, they don’t care what you did to the money, you have to pay it back. But there are some contracts with investors that can make you consider a loan that you would an investor.

And it's true as the chance that developers will runaway with the money is possible to happen, the risk for those investors to lose after entrusting their money to those people behind the project can take place, same with what you mentioned,  it's easy for those developers to propose and seek for investors trust but the outcome is not assure that the investors will surely gain,  though if in case the project succeed,  then that risk will be converted to a decent amount of profits.

The bigger risk is at the investor. The person who is working on making their "dream" come true, or even just making a business that they want to try, isn't spending anything but their time, that's it, their time, and they are even getting paid for it, by the investors basically. Investor on the other hand is putting up their money, and that is the risk we are talking about.

I have seen people get thousands of dollars for basically doing nothing and promising everything in the crypto world, go look at launchpads and the highest funded ones, you will see that most have nothing at all but promise to be better in the future. That is a risk by investors not risk by the devs of those projects because they are risking nothing at all.

I often watch YouTube videos that discuss this, the majority of the discussions explain in detail the advantages and disadvantages of both and from watching videos on YouTube that discuss this, I see that waiting for investors is much better than making loans to banks, especially when start-ups have There is a big risk of loss, so borrowing money from the bank to start a start-up is the wrong thing to do.

I'll choose to get an investor because I don't yet have experience running a profitable business with positive cash flow. By finding an investor, I must prepare a pitch deck, which forces me to continuously improve and verify my ideas. I also learn how to convince investors. This is a very good experience. So, besides getting a cash injection , I can learn more about the potential of my ideas because I need to convince investors by answering their concerns.

As you said, it is difficult to find investors. You need to be in the right place at the right time or people you know should be a reference for you to find investors. There can be many things like that, but in the end it is not easy to find investors.

An idea is always valuable, but finding the person who will invest in this idea is even more valuable. If we cannot find resources for our idea, we have to find investors. If we can't find investors, unfortunately the value of our idea decreases day by day.

I'll choose to get an investor because I don't yet have experience running a profitable business with positive cash flow. By finding an investor, I must prepare a pitch deck, which forces me to continuously improve and verify my ideas. I also learn how to convince investors. This is a very good experience. So, besides getting a cash injection , I can learn more about the potential of my ideas because I need to convince investors by answering their concerns.

One of the major problem an average person that has an incredible business idea faces is the ability to raise the initial capital that's required to bring his ideas to life. and in solving this challenge, the available option has always ranged from iether taking a loan from a financial institution or seeking for investors that will take a particular percentage of the company and will in return provide the necessary financial support.

Considering these two options that's one of the easiest to get, taking a loan sometimes comes with a whole lot of strict terms and conditions and  with the high interest rate expecially in my region, it's even deficult to put that as an option. Looking at the case with most investors who are just looking for ways to double there already dormant funds, and care little about the owner of the business, it seems to be another problem dealing with them as most of the ratio they intend getting from you seems to be too big expecially when they already know that your proposed business have an higher chance of doing well in the long run.

I know that as a start-up, these sources could potentially help your business to upscale at a very sharp pace and that from the angle of allowing an investor to buy into your business, you could get other added advantage like getting advice and connection that will help boost your business but I'm just curious to ask;

 If you have a well thought out business idea but don't have the needed capital to keep it functional, is getting a loan the best option or looking for interested investors?

Would trying to start up the business in your own little way the best option or can you consider bringing a third party into the business who will just serve as a partner that contributes just money?

There are both risk and advantages in terms of that both side, more likely the point is how you trust your idea and how will you deal in selling it with the investors, or, how good you think the potentials and work with barrowing or loaning the finances thru banking, there's always fessibility studies that you need to conduct before you decide if which path you'll want to resort your finances, I like that idea about investors who can shares idea on how you can improve your business, unlike with banks where the intention is to gain profits alone, but with investors since they also risking their money, there's chance that they will also put some fresh ideas that will let you to link or to adopt with good adjsutments for the betterment of the business.

I think many people are afraid of third parties simply because they do not want to share their business with anyone. Some people may not have enough money to start a business, but they can decide to take a loan rather than work with an investor to start a business. We must understand that getting a loan from a bank is very risky because if you do not repay the loan on the repayment date, the bank will not extend the repayment date, and even if they do, they will still need additional profits in return. If the business fails, the bank is unconcerned about your losses, you will return their money or seize your property. Another advantage of working with an investor is that he may bring new ideas that will help the business grow. A bank cannot advise how to build your business because they are also in business, which is to give people loans to start their business and repay them with interest, and an investor will never request interest unless his share with the company.

I think it would be better if someone decided to take a loan for their business. It would be better for them to analyze first whether the business they are running will really develop well and if they think the business will continue to run well after they take out the loan and they will be able to pay off their loans and if they can't pay them off, it would be better for them to postpone the loan they want to take. You are right. Those who have business sense will certainly make decisions about their business and will never borrow beyond their means.

For me getting an investor is the best of the two. One simple reason is that if a business fails you still have to pay the the loan taken, but with an investor, you both share the loss. Losing a business and having so much debt to pay afterwards is a very difficult place to come out of.
Also, the amount of money you'll get from the investor(s) you'll most likely not get from a loan. Financial institutions won't want to fund the whole of your business, it's too much of a risk. They'll either give you part of the money or none at all.

Besides, I always wonder why people are opposed to getting investors for their businesses. If you really want that business to be as big as you want, you're going to sell shares eventually because you'll need those capitals from somewhere, so why be scared of a third party?

I will not advise for someone starting up a new business to take a loan for it, that is a bad way of starting, instead they can learn to earn and have or build up a start up capital for themself than borrowing, but the option of getting an investor is also not a bad idea in this regards, but when we have gotten one, we must be able to ensure that the terms and conditions involved are what we can comply with, lastly, we must not disappoint our investors by having a failure in what we do, so its a must that the business must be productive.

I think it would be better if someone decided to take a loan for their business. It would be better for them to analyze first whether the business they are running will really develop well and if they think the business will continue to run well after they take out the loan and they will be able to pay off their loans and if they can't pay them off, it would be better for them to postpone the loan they want to take. You are right. Those who have business sense will certainly make decisions about their business and will never borrow beyond their means.

One of the major problem an average person that has an incredible business idea faces is the ability to raise the initial capital that's required to bring his ideas to life. and in solving this challenge, the available option has always ranged from either taking a loan from a financial institution or seeking for investors that will take a particular percentage of the company and will in return provide the necessary financial support.