Should You Find Investors? Consider These Alternatives First

As an entrepreneur, you’re constantly looking to earn the capital needed to pull in more customers to purchase your goods or services. For many business owners, getting that cash infusion means slicing off a piece of equity and feeding it to bloodthirsty investors, like in ABC’s ‘Shark Tank’.

Consider this a warning to tread water lightly! You may think you are Mark Cuban’s buddy, but you’re much “chummier” than you think.

If control of your business matters to you, check out this pitch that will help you consider whether or not to find investors. In less than 90 seconds, you’ll learn when to tell those sharks, “I’m out!”

Click to tweet this: Think twice before handing your equity over to Great Whites and Hammerheads @DaveCrenshaw

Video transcription:

One of my viewers asked the question about investors. Should I get investors? And if so, when is the right time?

Shows like Shark Tank have popularized the idea of going out and getting investors. It makes it look like a lot of fun. The reality is–you spend too much time with the sharks and you’ll likely to get eaten.

Now, in rare cases you want to get investors. But in most cases, it’s better off to do one of these two things:

First of all sell. Just sell your product or service. Not only will this give you more money, but it also gives you more basis for growth if you did decide to get investors in the future.

And second, use debt. Debt is far more powerful for your business because it doesn’t require you to give up equity.

I’d like you to share in the comments section below–do you feel you want investors? And if so, why do you want them?

Also, if you have a question you’d like me to answer in a future video, ask that below as well.

Thanks for watching. Now please, stay away from the sharks.

Join the conversation: Do you feel you want investors? And if so, why do you want them?

I respond to every question and comment. So, please, join the conversation!


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8 Archived Responses to “Should You Find Investors? Consider These Alternatives First”

  1. Angy Ford says:

    I agree completely, just never had thought of it this directly. Thanks!

  2. Yes I want investors why should I not want to I need too learn

    • Dave Crenshaw says:

      Hi seacretproductsL. Thanks for your eagerness to learn. Investors have their place, yet inexperienced entrepreneurs seek them too early, or shouldn’t be seeking them at all. Bootstrapping (or funding it yourself) is almost always the best way to fund a business in the early years. First prove your worth. Prove that you’ve got a good product or service by going out and selling it yourself.

      I suggest re-watching the video above, as I touch on a few of the reasons why you DON’T want investors. Then if you want to dive deeper into the subject check out my Small Business Secrets course on lynda.com, in particular this video: https://www.lynda.com/Business-Skills-tutorials/Finding-funding-opportunities/156584/191229-4.html

      If you don’t have a lynda membership yet, you can get a 30 day free trial at http://davecrenshaw.com/free/

  3. Nick Webb says:

    A big fat NO! Most of my peers that have taken in investors go through a lot of pain later on. That said, it is a good option for some businesses that need massive scale (product businesses).

  4. Dave Crenshaw says:

    Thank you for adding that voice of reason, Nick.

    Yes, for businesses that have a product–especially in the tech arena–and need to ramp up quickly to get a jump on the competition, there is value in getting investors. However, in my experience I’d suggest that 95%+ of small businesses out there do not need it or are trying to get investors far too early in their life cycle.

  5. Michael says:

    This is quick and simple, and VERY important for small start-ups. I think seeing Shark Tank gives people the feeling that 80% that go on the show get a deal. In reality it is probably only 30% and that is after being screened by other non-sharks.
    It has also kind of become the cool thing to do. And that is NOT EVER EVER EVER a good reason to take imvestor’s blood money. Thanks Dave!