Monday, April 14, 2008

Is Giving Up a Controlling Stake Worth It...?

I look at financing as one of the most crucial and important parts of a startup business. While working at Citigroup I’ve had the opportunity to speak to many entrepreneurs and discuss where they feel there business is and where they want it to go. Working in Mergers I’ve hear numerous times an entrepreneur wanting to find more financing and wanting to expand the company, but when they were raising capital they either gave up to much ownership of the company to one Venture Capitalist firm or, they gave ownership away to numerous investors, which took the power out of the entrepreneurs hands. Although raising capital and trying to raise as much as possible at the beginning feels like it the best thing for the company, eventually it could turn into a nightmare. Seeing your company grow, and wanting to see it grow to it’s full potential and having that dream crushed by the investors or venture capitalist firms is something I surely do not want for my company. My main goal for my start up is to make sure that my management team and I are in control of the controlling stake of the company and eventually have the final call on all decisions.

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