They want you to put the money to use building an asset, something that works better and better over time, something that makes your project more profitable and more efficient.
And they want you to use that asset to create value that will pay them back many times over.
Most small businesses ignore both of these desires. There’s so much stress from being on the edge, it feels like money will relieve that stress. And in the short run, it will. But if it doesn’t build an asset, soon you’ll be back to the edge, with the added problem of having an unrepaid investor as well.
Assets (buildings, machines, powerful brands, new technologies) are less essential than ever before. For many organizations, a laptop is worth more than a building or a punch press. That’s great if you’re getting started, because the connection economy has made the cost of entry lower than ever before.
It also means, though, that the easy-entry business you’re in might not respond well to the investor’s money. If there isn’t an asset you can buy and build and defend and monetize, you’re much better off not chasing one.
Reblogged from: here