Creating a Lucrative Business Opportunity for Both Partner and Investor

November 15, 2019

If you want to take your startup business to the next level and make a profit while doing so, you should look into investor options. An investor is a person,…

If you want to take your startup business to the next level and make a profit while doing so, you should look into investor options.

An investor is a person, business, or entity that commits to giving a business money with the expectation of the business paying that money back with interest or an agreed upon benefit. To maintain a relationship with an investor for a long period of time, you must make sure that you are providing that investor with its return as well as growing the business and  while still providing yourself with your own return on investment.

This can be a difficult task to take on especially when you are a new business or startup and aren’t familiar with navigating outside funding sources for your projects or ideas.

To help you learn how to create a lucrative business opportunity for both you and your investors, we are giving you a guide with tips on how to legally make sure that both you and your investors remain consistent and compliant in your financial dealings.

Get ready to make some money!

Decipher What Your Startup Hopes to Get Out of a Partnership

When making the decision on whether your business should try to incorporate an investor or not, you need to first be clear on what needs you have that could be met by a potential investor.

Are you looking for a business partner that will bring a needed skill set and or product ideas to your startup? Do you want an investor to help you increase your business’s capital? Do you hope to utilize the money you gain from an investor to increase the marketing for your business?

Whatever it is that you need the funds of an investor to help you accomplish, be clear about it out of the gate. The worst thing you can do is be unsure of what your business needs to grow. Knowing what needs are lacking and need to be met before you approach a potential investor will help you decide on whether partnering with an investor is the right step and at what level.

Figure Out Which Type of Partnership Best Fits Your Startup

Investor – partner business relationships can come in many different forms.

A limited partnership with an investor allows the investor to invest in your business without incorporating or selling any of its stock. Thus, the investor can make a profit off of your business with limited risk.

A silent investor is one that invests its money in your company while not interfering in the day to day management or decision-making of the business. Angel investors are people that invest their own money to help fund a startup or a small business.

To ensure that all agreements made with an investor go as planned, invest in the services of a business startup lawyer. To help you make important business and finance decisions especially if that is not your area of expertise a startup business lawyer could guide you on needs, legalities, areas of caution and even help mitigate problems before they happen.

Learn About the Goals of Your Potential Investor

Your potential investor may be a private venture capitalist. Private venture capitalists tend to be individuals or privately-owned companies. These individuals or companies want a high return on their investment.

They also want access to new technologies and markets. They even want to involve themselves in the day to day management of your business. Corporate venture capitalists want the same thing.

If your investor is an institutional lender, they may want a long-term business relationship with you. When your investor is a small business administrator, it will provide a direct loan or a bank loan to you.

Negotiate Your Terms

Once you figure out the needs and return requirements of you, your startup or business, and your investors, negotiate the terms of your financial relationship. To help you negotiate your terms, make a partnership agreement and hire a startup business attorney.

To learn more about business decisions that may require legal assistance, contact us here.

You May Also Like…