An entertainment business eyes worldwide expansion
Should this owner seek out international investors to grow his business?
Jean Luc Gaudry, Los Angeles
I have a unique music Web site on which one can find listings of shows, bands on tour, clubs and venues. I have two questions. I am looking for some investors – what are the biggest mistakes entrepreneurs make when they decide to add an investor to their company? Also, I want to set up a company in Europe and eventually have my Web site branch out all over the world. Is it better to have different investors on each continent?
By Myrlande Davermann, Fortune Small Business contributor
Dear Jean Luc: “Having investors in multiple continents is the last thing you want to do,” says Jim Beach, director of InternationalEntrepreneurship.com.
He cautions that as an entrepreneur you will lose some control of your business – and , potentially, some of your creative freedoms – if you relinquish partial control to investors. Beach, a former entrepreneur himself, says the biggest mistake he has seen entrepreneurs make is giving up too much control.
“Sometimes, it is better to grow small and slow,” he says.
To help you strategize for breaking through to international markets, Beach recommends hiring a college student whose task is research the international potential of your Web site. “Why have expensive talent, when you can have passionate talent?” he says. He also suggests going on Facebook and Craigslist to scout out young talent eager for music-industry opportunities.
“Investors are looking for a proven business model,” Beach says.
His advice: “Make the U.S. profitable before you branch out internationally.”
Raj Khera, co-founder and CEO of More Business.com adds: “Investors will want to know how your company meets a demand and how their investment will grow. Regardless of their location, you should seek 'smart' money."
Smart money, as he defines it, is an investment from people who know your space and can open connections and channels to help you grow.
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