Do Not Take Money From Strangers
This adage is in the same category as never taking candy from a stranger.
ADAGE
Do Not Take Money From Strangers
RESPONSE
This adage is in the same category as never taking candy from a stranger. Never build a business plan around the necessity to raise venture capital from outside investors. The first thing they do, even with a minority investment, is take contractual control of all key decisions. Instead, use customer money to finance your business. Design ”pay as you go” business models using customer deposits or advances. Use price discounts, exclusivities, and other tactics to entice alpha/beta customers to purchase. Run your business model for your customers—not investors. Commit yourself to the long haul of your product or service and its benefit to others. That will cause an increase when enough people are impacted by your excellence. This rule assumes you have the luxury of time and choice. Many enterprises will encounter unexpected challenges that require immediate capital infusion and do not have the luxury of time or choice. In this case, they may be tempted to take money from individuals or sources that are antithetical to Christian values.
SCRIPTURE
Proverbs 13:11 Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.
1 John 1:7 (ESV) But if we walk in the light, as he is in the light, we have fellowship with one another, and the blood of Jesus his Son cleanses us from all sin.
QUESTIONS
How do the Scripture(s) apply to the business adage?
Your pagan brother-in-law wants to invest. Do you take his money? Why or why not?
Are pay-as-you-go business models Christian-friendly? Explain.
Are Christian investors good investors to have? Explain.
When do you walk away from a potential investor?
DOWNLOAD
Download the free PDF worksheet for this adage, print it, and use it in your meeting, conference, or group.
COMMENTARY
Dave Ramsey has been quoted as saying the only ship that won't sail is a partnership! (Or something like that.). I did a startup that utilized printed material...my first version had a couple of mistakes and was not to the level of quality that I desired in version 2. If I would have been infused with other's money I would have a basement full of paper waiting to become firewood! Almost did a partnership on another business where the people working there that would have been partners eventual left and did not share the same values. Grateful the partnership remained my wife and I!
Yep. Can't tell you how much I agree with this. I've seen too many entrepreneurs mindlessly chasing VC money and bank loans without considering alternative forms of financing. VCs are a bunch of thieves and pirates. The banks are fine as long as your crystal ball is crystal clear. Banks put you on a really short leash. Katy bar the door if you have a bad year.