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What risks are involved when borrowing from a venture capitalist?


What risks are involved when borrowing from a venture capitalist?

He has complete control over the company.

there are several
One is that in many cases these people may be intelligent and smart they may want to get there hands involved in the daily operations too much and interfere with the management
despite then fact that you may the only one with the technical know how of the business.
Two is that with every prospect you speak to you have to explain from the beginning to all the way to end countless times on why they invest in you idea or business..I heard many people complain about this....
three more times than not there expectations are going to be much higher in regards to the income
than you are comfortable with
many of these investers are looking for the next microsoft or Dell
and that is not realistic at all...
If you we to go with lets say a SBA loan you are only obligated for that monthly payment and that is it and you do not have to answer to anyone directly unless you are late on your monthly payment

I personally looked into this myself but the fact that my business is pretty specialized I would be VERY uncomfortable having a yuppy kid telling me what to do, and in some cases they treat you as if you are employee
I hope that helps

Throw these two other reasons on the pile:

A. They take you to the cleaners on valuation. They get a lot of equity interest for alot less money. They need to - they might only get 1 out of 10 investments that get anywhere.

B. If you have a good business, they want you to fail. They can bring someone else in to turn it around and keep all the cheese for themselves.

Venture capitalist would demand higher cut of the profit.

You better have a real good contract lawyer. Here is a better idea:

How would you like to get into the ever-growing Health field? Not selling any products and totally on line? Build a residual income and all kinds of help from successful people in the business? Without the cost of store front and over-head expences.Pay yourself first...

IM me deburleigh@yahoo.com

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