A great way to grow a company is through investments by outsiders. Depending on the type of business you are in, and how established you are, there can be many sources of capital to help you grow your business that don’t involve a loan from a bank.
Entrepreneurs often to look to people they know or are related to – so-called “friends and family” for early investments. More established companies often look to outsiders beyond their immediate circle for growth capital – whether they be wealthy individual investors, the “Angels”, or professional venture capital investors, for both an infusion of growth capital and business advice and help managing their growth.
Each stage of investment has certain characteristics for the types of equity and the type of agreements that are typically expected for the entrepreneur and their investors – promissory notes, convertible debt instruments (with or without equity “kickers” such as warrants), common stock, preferred stock, and combinations of all of the above can all come into play.
If you are looking to raise money from outsiders, let me help you negotiate the terms and find the best structure for you and your investors.