Financing your business can be a very tricky affair to pull off. On the one hand, you might be very tempted to simply self finance your business, and take your lumps out of your personal cash hoard (or maybe it’s more like a small wad). While this strategy will not hold you accountable to any meddling investors, it can also be a sharp blow to your retirement savings. And if you fail this way, you will have a much smaller cushion to fall on if your business should be less successful than you initially expect it to be. Soliciting investors may seem a little bit too “Silicon Valley” for your tastes, but it can actually be a good way to get a hand.
Simply walking up to someone and asking them for a hand out is about as foolish a way to get any kind of funding as you can get. But when you have a solid plan behind you and you offer an equity stake to your investors, that can be an entirely different matter altogether. While you might not get much funding to start with, you can still get a great deal of feedback, both on your idea itself and on how you intend to execute it.
While you might just be wanting to get tons of money out of your business’s first couple of rounds of financing, you have also got to consider that a lot of times the business advice that you will get from VCs and angel investors is even more valuable than the massive bankrolls they can throw at you. Sometimes, just the fact that you are talking to a person who was once a senior manager and now invests full time is a symbol that you are arriving at a place where very few individuals will ever get. This increased confidence is a great boost to your cause.