Investing in Your Own Business

The idea of investing in one's own business has come up a lot recently. While it is great to use OPM (other people's money), one needs to believe in her own venture. When I am working with clients looking for debt financing, it is generally a requirement that they have put in cash equity themselves into their business. This shows potential lenders that the owners believe in what they are doing and also that they are taking on risk just as the potential investor would be.

I am not saying that you should use up all of your savings on your business, but I do remember a class in business school discussing using up all of your credit on credit cards and loans to get a business going if you are an entrepreneur who believes in his own business.

The awareness for today is to pay attention to whether you are putting as much money (or time or anything else) into your business as you are asking for or expecting of others.
~Paul