[This article was written by Anica Oaks.]
Getting an initial round of investment can be a great deal for any new start-up. At some point, though, you may realize that you need to go through that process again. Below are four signs that it’s time to find a new investor for your start-up.
You’re Short on Cash
One of the most common reasons to seek out a new investor is because of a cash shortage. Note that this does not mean your business is failing—after all, few investors will touch a failed idea. Instead, you’re reaching the point at which your on-hand cash cannot keep up with the real demands of your business. If your ability to make payroll isn’t lining up with the money your company is making, you might need a new investor’s help.
You Are Going in a New Direction
You may also need a new investor to help you when you choose to pivot. You might notice that your online sales far outstrip your brick and mortar sales, for example, so you might need an investor who can help you to invest in better online infrastructure. On the other hand, an investor might be able to help you better set up to make the switch to offering a new type of service that complements your original ideas. When you decide to move in a new direction, you’ll frequently need new investors to help you make the change.
You Are Experiencing Growing Pains
Sometimes a new investor is needed because your business has simply outgrown its old model. You might need to buy new equipment to keep up with demand, expand to new facilities to deal with a growing staff, or you might even need more capital in order to take advantage of new technology. After undertaking a credit risk assessment for your business, investors will be able to help your business to take the logical next step.
There Has Been a Major Shift
It’s also wise to look for a new investor if there has been some kind of major shift in the way your business works. This can be due to internal or external factors, but it’s always something that’s going to cause a commotion. You might have lost a vendor, seen a new competitor enter the market, or you might even have stumbled upon a more efficient way of doing business. Regardless of the change, you may need a new investor to better deal with the new circumstances.
New investors can breathe life into your company. Make sure you seek them out when it’s time to make a change or when you absolutely need a cash injection in order to stay successful. With careful consideration, you can choose an investor who will help you meet and exceed your goals.
Freelance writer and web enthusiast