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Financial partners vs. Skill-based partners - which ones you should choose and why
When a lot of companies are starting up or hit a point where they plateau, they will likely look for an investor for that boost they need to reach more customers. That means you need to start thinking about a partner who is solely coming on board because they have money or if they're coming on board because they have skills.
A lot of businesses are looking for investors in order to boost their profits, which means investors get inundated with applications for investment opportunities, and you might fall through the cracks if your business isn't nearly as profitable as the next one. If you're still a small fish in the sea of your industry, you may want to partner with someone that has the technical skills to boost your business, but this discussion will iron out your concerns and give you a better idea of which to aim for.
Do you need money?
If your business is framed out just right, it has filled a gap or void within your niche, and you can't get it off the ground because you're tapped out financially. You may need to look for an investor that will come on board and pay for anything you need.
You'll need to have a detailed business plan in place to give to potential investors so they know what you have, what you plan on doing, and where they can help you the most. If they feel they're not the right fit for your business, likely because they don't understand it, they will decline your funding request and look for other businesses they're more comfortable with.
Target investors who have portfolios filled with businesses like yours. This sounds backward, but this means they are familiar with your business model, and they will know how to boost you more than other investors who aren't in your industry.
What skills do you possess?
If you're an amazing programmer and website designer, then you likely aren't the best at SEO and marketing. You could be the Unicorn of websites and do everything with precision, but in my 15+ years online, I haven't met too many people who can do it all, and that's probably why you should look for someone who has skills.
If you have plenty of money coming in, but you don't have features on your website that you deem necessary, you'll want to bring on a partner who has the skills and connections to get it done. I like partnering with programmers because I'm horrible at it. This means I have to worry about the marketing and SEO while they program the features I need, and we split profits at the end of the day.
What stage are you at with your company?
It doesn't matter if you're a startup or experienced business, you might need an investor to come on board, but not all investors will throw their money around. If you're a startup, you might get the attention of some investors because you have a great idea, but if you're not profitable, then you could push a lot of them away. Now, if you're an aged business with a decent amount of sales and experience, you could attract a lot of investors but scare away the ones that are looking for startups where they can get a bigger chunk of the business for helping out.
Finding the right investor isn't an easy task because there are so many out there that are specific to what they invest in. Some won't stray far from a single industry while others won't invest in startups because it's volatile. You need to take your time to figure out if you want an investor to come on board who has the skills to get something done or know from the start if they're just in it to give you money. Knowing what you want from the beginning will help you out in the long run if you think your investor isn't pulling their weight.
Thanks for reading