Dear Aunty B,
I am starting a business and thank you very much for the advice. I am in the fortunate position of being able to access the capital I need from angel investors.
I have worked out exactly what I think I will need. Do I take that investment in or do I take a bit less in, give them less equity and try to skimp?
Cheers, B.
Dear B,
Neither. You take more than you think you need. Why? It will take twice as long and be three times as hard to start your new idea.
If you fund the business correctly at the start, you will have the cashflow to last long enough to make the business viable. It also means you won’t have to keep returning to shareholders or banks to ask for top ups.
Always take more funding in at the start and have it in reserve. That way you can sleep at night. A good sleep not worrying about every cent for the first few years beats a few per cent equity any day.
Good luck!
Your Aunty B
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James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
