Money vs Control in an Investor's Round

Money is gasoline. We need it to move our business. If we are at a very early stage of the company, we usually do not have enough money, and we have to look for investors. The best investor ever is a customer. If you have some of them, then you do not need investors; you need to work hard for your clients and be able to grow your business with them. But if customers are not around you need investors and their gasoline to move forward.

Founders usually have the same debate: look for a high valuation and surrender to term sheets, or take a lower valuation and term sheets that better reflect their interests. It is the typical debate between money and control in an investor's round. Money is gasoline and control is power. But what is the essence of the debate?

Founders need to have control of their companies at the early stages to drive the vision of their ventures and grow their day-to-day activity and core values. Investors want to maximize their investment, pushing founders and their ventures with all their past experience. But not all the people are the same: not all entrepreneurs are able to succeed and not all investors are bringing smart money to the table. We can be wrong, a that is why we need to share our visions and ideas. Add and multiply our possibilities to succeed getting talented people on board. It is about people, not money or control.

Time passes and you realize that the ideal world does not exits and the most important thing is to have created the opportunity to go farther. And from there balance is everything. Understand why things happen, negotiate and manage every new debate keeping in mind that businesses have to move forward. I believe these are the main ideas in the debate between money vs control in an investor's round: make things happen. Even if it is not the perfect world you dreamed of.

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