The project is good investors will run away. How do entrepreneurs scare off investors?

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Projects are good, and investors sometimes flee. Why?

Jim Price, the author of this article, has Jim Plesse several times and has been a guest lecturer at the Zell-Rory Institute of the University of Michigan's Ross Business School.

Not long ago, a couple of entrepreneurs asked me for advice from a new company. They want me to help. Develop promotional strategies, refine business models, calculate financing expectations, and recommend financing options. So I chatted with the pair for one hours, hoping to get a clear idea of their business.

I was satisfied with the result. They have the four elements I value most to the entrepreneurial team:

1, really innovative new business philosophy;

2, the product preliminary molding;

3, the industry has a unique view;

4, have experienced the hardships of entrepreneurship.

They promised me a lot of stocks and a board seat to make me a consultant. I said I would seriously consider these conditions.

But after two days, I turned them down. What's the reason?

In communicating with them, I found that the various problems of the entrepreneur did not fall on the pair. Specifically as follows:

1, despite the lack of seniority, but they insist on personally as a leader: the early start as president or even the CEO is no problem, but the old entrepreneurs know that the company developed to a certain stage, should be introduced to the experienced professional managers.

2, they are not open-minded: in most cases, they think they already know the answer, so they are not good at seeking and accepting the advice of outside experts and investors.

3, their control is too strong: it is difficult for them to let their subordinates independently, even the simplest decision to personally participate.

4. They want to raise money but are unwilling to abide by the rules of the game: they want (or need) investors ' funds to develop their businesses, but they worry about dilution, fearing that board seats and voting rights are in the hands of new investors.

The problems of entrepreneurs not only scare off outside investors, but also deter top talent and good advisers. Why? Because the company, led by such founders, must not do much. The founders ' ability will limit the success of the business, and their attitude will scare away the talent and capital.

In contrast, the founders without these flaws would consider the profits of the business rather than their own. Their focus is on the introduction of the best and most sensible capital. They are good at accepting the advice of professionals. They are not worried about being surrounded by people who are smarter than themselves. Their goal is to make the whole cake bigger, not to confine their gaze to their own. The overall success, Virtuous Circle also formed: The work environment is full of vigor, the user actively participates in the interaction, the investor and the shareholder also will obtain the huge return.

At the same time, many of the most faulty startups are still struggling to get enough resources. Such entrepreneurs often point to potential investors, customers, and employees, who say those who reject him are "not at all knowledgeable".

(PEI)