Taking investor money (as opposed to bootstrapping) can come with a significant amount of anxiety and stress. Here are a few common reasons why entrepreneurs may experience anxiety when taking investor money:
- Loss of control: Accepting investor money often means giving up a portion of the company’s equity, which can result in a loss of control over important decisions. Investors may have their own ideas and opinions on how the company should be run, which can create tension and conflict.
- High expectations: Investors often have high expectations for the companies they invest in, and the pressure to meet those expectations can be overwhelming. Entrepreneurs may feel like they have to constantly prove themselves and meet strict performance goals in order to keep their investors happy.
- Fear of failure: With investor money comes a higher level of risk, and the fear of failure can be paralyzing. Entrepreneurs may worry about what will happen if they are not able to meet their goals or if the company doesn’t perform as well as expected.
- Increased scrutiny: When entrepreneurs take on investor money, they also take on additional scrutiny. Investors may want to review financial reports, attend board meetings, and ask tough questions about the company’s performance. This can be stressful for entrepreneurs who may feel like they are constantly under a microscope.
For these reasons and many more, it is important for entrepreneurs to carefully consider the potential downsides and make sure they are comfortable with the added pressure and expectations that come with taking on investors. “Five ways bootstrapping can make you a better business” gives compelling insights as to why bootstrapping may be the better route for you.