Reasons Why an Investor Would Want Nothing To Do With Your Start-Up

Mar 06, 2017

As a new entrepreneur, getting the necessary funding for your young business is likely one of the concerns keeping you up at night. What do you do when your savings are not enough and applying for a loan is not a viable option? Well, you could try wooing an investor.

Investors are a good solution to a startup’s funding problems because rather than handing you the money as a loan, they instead get a share of your business. It might sound scary, but you’ll be gaining a resourceful partner that is determined to ensure your enterprise succeeds. That said, every startup is risky. Appealing to an investor means going out of your way to alleviate their concerns.

Below are a few things that might discourage an investor from joining in on your ambition.

  1. High risk factor

Certain business sectors are known to be more prone to failure than others. If your operation falls under industries like online retailing, hotel management, etc. getting an investor on board will not be easy.

The same goes for dealers of products that attract strict government regulations or supervision, such as drugs and pharmaceuticals.

  1. Large initial capital requirements

A startup that requires an enormous initial investment will likely only be considered by large players. And even they will need you to convince them that your idea is the best they’ve ever heard.

Ensure you do sufficient research to uncover the investor with whom you have the highest chance of scoring, and structure your presentation the best way you can.

  1. A weak business plan

An investor will not buy into your startup unless you show them that you have well-defined goals and a practical plan for achieving them. A good business strategy proves that you believe in your new enterprise and you’re committed to seeing it through.

  1. Poor public reputation

As successful business people, investors have an image to protect, and they won’t risk tarnishing it by investing in enterprises that don’t completely agree to social or legal standards. If you’re in need of funding for your gambling site, or firearm business, it would be best not to bother approaching an investor.

  1. International operations

Investors like to keep their new acquisitions close, and are therefore often reluctant to fund companies outside their geographical comfort zone. Financiers always consider overseas investments as high-risk regardless of the experience you have with them.

 

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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