10 Things You Should Look Out For From Potential Investors 

Are they a true Investor or a "Wolf "in Investor's Clothing?  



As those of you who know me can attest, I preach and try to teach about this topic because it's near and dear to my heart. If you're a business owner, at some point during your operations you've probably needed an infusion of cash or a true capital investment. Here' are 10 tips to help you avoid the "Wolf" in Investor's clothing when looking for a small business investor.

When deciding to move forward with a potential investor, make sure of the following:

1. The Investor knows the risk (the money he/she puts into the business IS NOT guaranteed to be earned back.) 

2. The Investor has no romantic interest in the business owner.

3. The Investor has no short-term time frame for when his/her investment needs to be returned (refer to #1.)

4. The Investor has a full and complete understanding of the business and how it makes money.

5. The Investor does not want a management stake in the business. 

6. The Investor knows your background and has confidence in your ability to run the business (refer to #5.) 

7. The Investor has signed an Investor's Disclosure Agreement. 

8. There is a dispute resolution procedure in place (other than court) in case a major disagreement should arise between the investor and the business owner. 

9. The Investor is willing to add his/her name on any state, city or other official business paperwork.

10. The Investor is willing to offer his/her intellectual input into the business, as well as capital.   

Remember, no matter how smart or savvy you are in your business, there will always be wolves in investors' clothing out there who are looking for new opportunities. Good luck! If you need help deciding if you truly need investors in your business OR think you have a potential Wolf Investor, contact our office and we'll be more than happy to help you.  

The Law Offices of Kawalski, Fletcher & Kirkpatrick, P.C.
3070 Bristol Pike 
Building 2 * Suite 204
Bensalem, PA 19020
Tel: 215 774-1449 * Fax: 215 774-1060
www.kfklawoffice.com



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How to Make Sure Your Small Business Investor is a true Investor and not a "Wolf in Investor's Clothing"

Kawalski, Fletcher & Kirkpatrick, P.C.