Taking the wrong deal can be a million times worse than having no deal at all. Having the wrong investor can change the course of your business — or can even damage your odds for success.
It’s All About Boundaries and a Win-Win
I’m a Business Plan and Pitch Consultant, and I support several investor networks. In my experience, my clients tend to land the best deals when they know their limits before they have their first investor discussion. Not only does this usually result in a deal they are happy with, but it is also a great way to impress an investor from the first conversation. They love when an entrepreneur has clear decision making skills and can negotiate like a pro!
Offering an investor majority share (50% equity or higher) is a scenario that a lot of people can be okay with — especially if you are looking to be bought out in a few years. However, if you don’t want “out” and you want to stay in control of your business, then find an investor who respects your position and lets you stay in control.
How to Reject an Investment Offer in Person
And, as icing on the cake, you can tack on: “If I come across any entrepreneurs who are doing things that would align with what you are looking to invest in, I would be glad to share that information with you in the future.”
How to Reject an Investment Offer in Writing
Or, if you are still open to haggling, say so. Tell them that you cannot accept the offer as it stands, but you would appreciate the opportunity to explore a variation that leads to a win-win.
Be careful, and don’t let your emotions drive you to sign on that line before doing your due diligence.
If you don’t have a lawyer, check sites, like SmartUpLegal.com , where you can get a free consult and find someone who fits your needs. A lawyer fee is worth the cost for protecting you and your business and for making sure you always get what you deserve.
Red Flag: Predator Investors
A word of caution: Before you master how to reject an investment offer, make sure you know “when” to. Many entrepreneurs are so eager for a deal that they ignore the warning signs of predatory investing. Wondering how to tell if your investor is not out for your best interests? There are specific signs that indicate you should walk away from an investment offer without guilt.