One of the most effective ways to expand or modernize all areas of business is, of course, direct investment. Today, without a doubt, it is the most effective investment tool for Russian companies. It is clear that this kind of investment has two sides of the coin - both positive and negative, both for the investor and for the company.
The basic advantage of this type of investment is obtaining the necessary funds for business development. It is worth noting the fact that so-called intangible assets can be invested in an invested company or company - information and technical support for the project, the credibility of the investor, his business connections. It is no secret to anyone that the sources of financing direct investments in the person of large and reputable companies have a positive effect on the image.
There are also disadvantages
The main disadvantage of injecting third-party financial flows into your company is the imposition of certain, often significant, restrictions on the activity. It is clear that a company or a fund that carries out direct investments intends to ultimately make a profit, which should not be less than a third of the amount of investments, and in some exceptional cases, significantly more. It should be understood that the invested funds can be returned both by selling the stake to another investor, and directly to the co-owners of the company.
On the other hand, there is a saying among the people that one who pays and orders music. This popular saying can be fully applied to the problem under consideration, since no matter what types of direct investments are used, they should work efficiently, at least from the point of view of the investor. Thus, the administration of the invested enterprise should understand that certain, often significant changes are possible, both in the marketing policy and in the management team. For example, many investors sanction the appointment of CFOs in invested companies.
Where and how to find sources of financing direct investment?
Before rushing into the pool of search for a much-needed investor, it is worthwhile to carefully analyze the state of affairs at your own enterprise, since there are some aspects that should be resolved and determined before direct investments arrive.
- Availability and literacy of the development of a business plan. There is no doubt that investing in a start-up company is, to a large extent, a more risky occupation than in proven oneself in a certain field. The document does not necessarily have to be presented in its canonical form, but it should clearly reflect the direction, forms and methods of using the funds received, as well as reflect those types of direct investments that can be used most effectively.
- The level of professional skill of the team and, above all, management, should not be determined by words, but by certain achievements that characterize the ability of managers and performers to achieve the goals set by the project.
- The dynamics of business development. It is clear that there are few investors willing to invest in unpromising, especially unprofitable projects.
- And the last, the owners of the company should clearly determine what part of their own business they are willing to give in return for direct investment. It should be understood that many investment funds are ready to cooperate only on condition that they receive at least a blocking stake, and more often, a control.
Only after understanding and evaluating the above aspects, it is worth trying to look for investors, either in the form of investment funds, or in corporations, or turning to private individuals.