Topic: Would you prefer getting a loan for a startup or getting an investor? - page 7. (Read 839 times)

Firstly, you must understand that your idea is so unique that investors may also approve it, and getting a loan would not be a problem for you. For me, both are the same. Not a single competent investor will invest money in a business that is lost in advance, and if so, then you will remain in debt to him. So what's the difference? By taking out a loan, you will independently go through all stages of business development, step by step. Yes, it is slow, but for the investor, you will have to regularly provide results, which also does not seem convenient. The main thing, I believe, is the idea, its uniqueness, or originality, and your environment, connections with which you have provided yourself should be so diverse that your business can withstand all the unexpected.

If not the difficulties that people have in raising money for their businesses,why would someone even consider to take a loan to start up a business.Its very risky for you and the business entirely.
The only advantage it has over you is that it helps you to start the journey;it helps you get started,and the excitement that it puts you into can make you forget about the conditions involved in it.
Personally I think its best to start a business with no debts and loans,if you borrow to start a business,you'll loose what you don't have.

I can say it is not wrong to start a business by borrowing or making a loan, but you need to think about the risks involved.The risks you'll face becomes a failure in the business already at its first stage.Start with what you have,encourage yourself,build it,seek advice's from financial experts and be in charge of your success.

If I believe that my business idea and foundations are rock-solid, I would go the route of asking for a loan to fund my business and try to work out my interest rates/payment plan that will benefit me in the long run. I would gather investors later when I have established my business since my credentials are already established, and I have a working business where my investors can base their decisions on. The more figures I make, the more investors will come in to support my business and its expansion.

While it's not wrong to ask for investors early on, it's hard to really get them to agree into putting funds when they are not seeing any numbers. It's 100% risk on them and lessens the risk on you, hence it will be difficult to get them jump into a boat without knowing its foundations and whether it's going to sail far or sink fast.

Loan would be better in my opinion but the best one is saving enough money so we can have some capital for when we want to create our start up, that way, it would reduce the amount of money that we're going to loan when we're planning to do it, less money to pay back and more money for yourself if the start up is a success. Regarding investors, maybe you can ask your parents or closest friends to chip in but a stranger investor is going to be a big no in my opinion.

This is a problem faced by many people because even though they have ideas and the ability to develop a business, not having capital support will prevent them from developing. Taking a loan is not a problem if you want to develop a business because we know that this decision must be made, and on the other hand, looking for capital support from investors will be a much more difficult burden. Taking money from investors would be very risky because from what I have seen, taking this opportunity will only make things worse when we work together to share profits.

I personally prefer to run a business on my own and if the business potential has long-term prospects, it would be much better to seek capital loans rather than expecting funds from investors. Third parties will always create problems in the future because when our business runs well there will be problems and it could be that they intend to control the business.

I wouldn't mind having another set of brains to help me propel the business forward. I think finding an investor that has credibility and knowledge about my field of business can be nothing but helpful. They would obviously want what is best for the business as their money is also at stake here. With this in mind, I am sure we can create a good and professional relationship together that could make the business succeed.

if you are newbie at building startup probably you should seek investor, why? because by having investor you also have better connections, better networking that could help you boost the growth of your startups, lets be frank here.
newbie at building startup usually just don't have something of significance to start with unless you're born with gold spoon then its gonna be difficult road ahead.
these investors could give you heads up, probably some of them even could be your mentor, because they are in the same boat as you wanted to see your thrive because they also betted their money on you, then big chance that they will also help you.
meanwhile if you took a loan just because you want to keep all the shares for you just because you don't have that idea to share the ownership of the startup with other people then you should know that its not gonna be easy.
there are so many scenarios where things can go wrong including your startup further tanks and you are in need to pay the debt while having absolutely nothing to your name.

but if you're so sure that you gonna make fortune with your startup getting a loan can be taken into consideration.
otherwise its just a big no no, many things can go wrong, not all startup will succeed what are the odds of your startup being that 10% remaining startup that gain success and foothold while lacking in various area.

If I have a good idea and a will to do it and I believe I'll succeed in it, I'd go for a loan. The problem with getting an investor is I won't have full control over how I operate the startup. The investor might tell us they won't interfere and we are continue with the work but sooner or later, the investor would want ROI.
If I really believe in the idea and is scalable, I'll be committing on scaling it to as large as possible to tap the market. A good idea with limited market would soon get too many competition. Not scaling would lose your headstart and competitiveness. That makes loan a much better option but the problem with loan is its hard to get, specially when you are a startup and don't have a large collateral.

Probably getting an investor? They're a lot more flexible compared to a loan in a financial situation and you can adjust as well as long as both parties agree, which means you can probably get better advantages compared to taking a loan from institutions. Plus, an investor is a connection as well so going from there towards their connections then towards the connections of those connections, you'd basically be starting a way for you to grow your own network.

Not that investors don't have their own downsides though. They can be a petty ass afaik.

Investor would be the safer choice, business is so risky we don't even know if it would be successful or not, so it is better to be safe in finding investor at least the amount of money that you would risk would be lessen, unlike if you would take a loan for it.
If it succeed then the profit isn't much as like when you are the only one in the business, but you could always start a new one from your profit right away, unlike if you took a loan and it succeed you need to pay up first before starting up a new one not to mention the interest that would accumulate while paying it.

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 prefer an investor and a mentor to join my startup rather than borrowing money from Banking institutions. Borrowed money needs to be repaid and banks will not support you in your business. An investor will not ask for loan repay, rather he will make money when you make money and suffer losses when you suffer losses.

But the twist here is that getting loan is easier than getting an investor. But with the growing startup ecosystem around the world, it's not too difficult either.

It would surely seem better on getting someone to invest in your startup than looking to the bank for a loan to startup. Loans require a collateral in equivalent to the sum being borrowed and asides all that, you startup has to look and feel promising to the bank in order for your loan to be approved. No bank would invest money in a business that they feel is bound to fail.

Same goes with an investor. I personally think while it’s better to source for an investor, it would be quite easier to acquire a loan from the bank for your startup. Like banks, investors aren’t necessarily going to put their monies into just any project especially a startup that is just coming off.
I would think they’re more likely to put their monies into something that has already started and is looking promising.

Speaking of circumstances, I don't have any luxury items, lots of land or buildings that can be used as collateral to take out a loan from the bank. and if I have to take out a loan from a savings and loan cooperative, apart from being small the interest given is also quite high, and if I start a business using a loan from a cooperative it seems like it will only be burdensome and difficult. .

So another alternative so that I can still realize what I plan, working with investors seems better than deciding to take out a loan. Although it is true that finding investors who want to work with us is not easy and requires quite a long process. However, by getting funds from investors, we don't need to worry about paying back high-interest loans. Investors are usually rewarded with a share of the business's profits, rather than a fixed monthly payment. Getting investors means we have partners in business. which of course can open up many new opportunities and support the growth of our business more than just the funds provided.

I say both are pretty much the same, but having a really strong angel investor behind your business/enterprise is going to do you a lot more favors than getting that loan check from the bank. Why? A couple of reasons really.

1. Added confidence among stakeholders and customers: Having a good angel investor with an established name in the industry you're in is going to put a lot of confidence to your business and product, people will think you know your shit because if this guy's in your back, you're technically as good as they come and you have a lot of potential/authenticity in your name.

2. Connections. One of the biggest things you would really need in business, no matter what type of industry you're in is getting connections to the biggest people in your field. Having a trusted angel investor not only entails money and support, but also putting your name up with their friends/connections who could expand your breadth and make your business/enterprise bigger than it is. After all, they most likely have a stake at your business, and would want to see it flourish and evolve cause that's their money on the line.

3. Lighter interest rates and terms. Businesses can be very flimsy sometimes, and this is where banks could fuck you over. Your business is down and you still owe them money? Not their problem, you still have to pay them the capital plus the interests rates. With angel investors however, you can try to negotiate the terms and see if you could have a more flexible type of plan with them, most of these investors would say no and will be on a take it or leave it situation, but that's way better than an upfront "no" from the bank per se.

So yeah, these are just a few reasons why I would always go for an angel investor rather than a bank. Maybe you guys have something to pitch or disagree with me on, just reply and perhaps further expand my knowledge considering I'm not really a business type guy.

Both options you offer have pros and cons.

To be able to attract investors and receive their investment, you first need to have a unique business idea and I think this is much more difficult than getting a loan to start a business. But in return, if you successfully raise capital, you will minimize risks because you only spend effort and time, and almost no money is lost. Meanwhile, borrowing capital will become easier than raising capital because you can be more proactive without depending on others. But borrowing capital requires collateral and will have higher risks if your business idea is not as successful as expected.

Honestly, if it were me, I wouldn't rush to think about this, what I'm more concerned about is whether my business idea is truly unique to make a difference or not because creating a unique idea is not an easy thing that a normal person can do.

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.

The issue with having an investor is that they will definitely try and meddle with your business decisions, that's why you don't see a lot of small entrepreneurs trying to get in with the investor way of growing their business because that's one of the causes and if the investors try to pull out their share, they might cause damage to your business. I guess it's a matter of which business are you, a big business or a small one because one can benefit a business if they're properly in the right place.

If you've got a good business and you know that a growth is what you'll need, I think that you'd benefit a lot with loans because that's basically making sure that you're doubling your profits as quick as possible.

If you think taking a loan from banks is hard since the borrower need to agree with so many strict terms, but I'm 100% believe looking for investors that want to invest in your start-up is way way way more harder than taking a loan from banks.

Let's say you're an investor, there will be a lot people reach you and ask you to fund them, but how you can be so sure if those people who run the start up aren't scammers? how you can be sure you will earn profit like their promise? you might not want to invest in someone project because you think it's better to invest in Bitcoin or your own business.

if at the start, it's better to get investment directly compared to a loan, that's because if you get investors then the money they invest can become capital and you won't have the responsibility to pay that capital, you just need to develop your company and provide results. according to what you promised. while on a loan, you need to pay it on time and there is a greater responsibility that you need to pay when you get a loan, not to mention you need to pay interest which is a burden.

because of this, it is better for me to be able to get investors in the early days of building a company, rather than a loan. but that doesn't mean a loan isn't needed, it's just that it's needed when your company is already getting stable income and you want to intend to grow the company bigger with your own resources.