SMEs - venture capital 2

The scenario - you have venture capital offers on the table. You might close a big deal or two soon, so not sure whether to take the money or not.

I suggest you take the money as soon as possible. Capital allows you to grow. Holding on to your shares, no matter what the reasons, is a big mistake. Take the capital and focus on growth, instead of equity protection. Big deals are often lost because the client perceives the risk of doing business with small supplier is too risky, and will then often not complete the deal. The additional capital allows you to grow, and that is indirectly due to the ability to put things in place for clients, such as liability insurance, which helps to mitigate the risk.

Never forget that big companies prefer to deal with other big or at worst medium-sized businesses. They do not like small companies. Simply because of the risk involved. So how can you minimise the risk. Take the money and do whatever you can to mitigate the risk. The capital strengthens your balance sheet if structured that way, and also allows you to do deals that you did not have the cash flow to do previously.

So please, do not delay - take the money and grow the business. There are no prizes for doing things the hard way just to keep equity. Take the money and grow.