How Some Venture Capitalists Try To Rob You Blind

Probably the single best way to finance buying agiving someone money, the longer they wait to give
business is with investors.it to you...the more desperate you'll be.
Not banks.And the more desperate you are, the more they can
Not family.ask from you in return.
And definitely not loans from other non-bankingIn the case of venture capital firms, it will usually be
organizations.getting more stock (and thus, control of your
However, I recently heard something that made mecompany) for their money.
think twice about exactly what kind of investorIt's a terrible thing for them to do. But many venture
financing is best.capital companies do it and so, you should be careful
You see, while it's true investor financing means youif you use one.
don't have to pay any interest (after all, they areBut really, this shouldn't be a problem for 99% of
investing money, not loaning it), not all investors arepeople who buy a business.
made of the same stuff.Because if you are buying a smaller business, venture
In this case, I learned about a dirty little trick manycapitalists generally won't bother with you anyway
of the more "unscrupulous" venture capital firms will(that's where "angel investors" come in to play).
play on people. And that is to sort of "string youAnd if you are buying a larger business (worth, say,
along" when you ask for money.$5, $10, $15 million or more) there are plenty of
In other words, they will keep saying you will get theprivate investors -- with more money than they can
money you need next month or next week orspend -- who will give you whatever financing you
whenever.need if what you are doing makes sense to them.
But in reality, they have no intention of giving youAnyway, keep this article in mind when thinking about
anything until the last possible minute.how to finance a business you want to buy,
Why?especially if you don't want to use a bank or other
Because, as any con man knows, when it comes tocreditor.