What Business Owners Should Know about Investors.

Investors are just people. You both have something of value. Any deal is an exchange. You can ask questions. You can control the level of formality. And ultimately, you decide whether to sell or not.

A business can be great in absolute terms, and still not be the right fit for an investor. The inverse is also true. When an investor says no quickly, they are respecting your time and their abilities.

Represent reality when you talk to any investor. Marketing a business may get people’s attention. But deals are thoroughly diligenced, and if what you market is not representative of reality, you run the risk of frustrating potentially great partners… and ultimately not doing a deal. 

Most investment firms, including Permanent Equity, operate under a defined mandate in terms of financial size of company, geography, and other parameters. You can see our criteria here. If you don’t meet a firm’s criteria, you can still introduce yourself. Sometimes they can make the best introductions! But they may also quickly pass.

Deals develop, as do relationships. Getting to know investors well in advance of needing to do something is worthwhile. Sometimes the right partnership appears quickly, but giving yourself the optionality to build trust over time may prevent future frustrations.

A deal involves over 400 decisions. A headline valuation is just one of them. The details matter to investors, and so they are likely worth your consideration as well.