Raising equity capital for a business venture never happens in a vacuum. External forces inevitably affect when and how and where investors are found, just as they affect decisions about how much money is needed to support the company for a few years until it starts showing a profit.
External forces include the financing market — the universe of people and institutions that constitute funding sources for a company — as well as the larger business market in which it operates. Understanding these forces can help an entrepreneur develop a fundraising strategy.
Pure financial investors are in the game to make the most money they can from their investment in a company. But even they can make mistakes and act impulsively. Continue reading