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What are my best options to raise capital and take on investors for my product? I have investors willing to give me varying amounts of money ($2k - 20k). I am unsure what my best options are (convertible debt, etc.) for taking on investors and keeping everything fair and simple.
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tynamite
tynamite's avatar

  • How much shares do you have, and how easy will it be for the board to outvote you?
  • Do your investors see you as a lackey person of ideas, or do they trust you to run a company from the ground up?
  • Are you required to give all confidential, trade secrets and blueprints to your board?
  • Are you allowed to keep your intellectual property so you can try again with another investor if things go wrong the first time?
  • If your funding runs out and your investors are out of cash, do they have the right to take over your company because you failed as a capitalist?
  • Are the investors looking for an exit after 3-5 years so you'll be answering to different masters later on?
  • Are the investors only interested in a seed round of which you'll need B round funding later on?
  • Are you good at reading contracts without spending $600 on a lawyer to go over it for you?
  • Can you negotitate parts of the contract you don't like, or is it an all or nothing deal?
  • How can you make sure you have as little or as much investors as possible, to even out the power balance?
  • What is the track record of the investors funding? How much leeway and control do they give the previous companies, and did it go sour before?
  • Are they into high priced markets like Starbucks, emerging markets, or visionaries that do things one step better?
  • Are you selling your soul?
  • Are these investors public figures, or do they prefer to stay in the shadows and not give press interviews?
  • Will you be given an advance that you have to earn back, or do they expect some of their investments to fail?


I can't think of any more questions.
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