Entrepreneurs often engage with investors one after another until they find one who bites. But this leaves the alternative to accepting whatever terms the investor offers an unknown at best. The entrepreneur may be forced to give up too much control or too much equity too soon, accept a valuation they aren’t happy with, or agree to some other unfavorable conditions.
If you are not willing to walk away from the investor’s terms, you won’t get favorable terms.
If you pitch to your potential investors in parallel, you will receive your terms at roughly the same time. Creating a market of buyers leverages scarcity and social proof to help you stay in control and close the deal faster. Nothing motivates an investor to become flexible like the threat of competition.
The best way to maintain control is to maintain good alternatives.
Venture Hacks is a massively useful resource for entrepreneurs who plan to accept funding of any type. Avoid many of the mistakes first-time entrepreneurs make, and learn hundreds of valuable “hacks” that can help you get funded with better terms, better valuations, and more control of your company. At well over 1,000 pages, The Venture Hacks Bible contains “every post from venture hacks ever” in one downloadable ebook.
