Decreasing My Monthly Bills

Although I’m not a spendthrift, I feel as if I never have enough money in my bank account. Because I’m setting aside cash in order to buy a new home, I’m always searching for ways to decrease my monthly expenses. Fortunately, through my research, I’ve found some great, simple tips that provide substantial savings over time. For instance, I turn off my HVAC unit whenever I’m traveling. I also conserve gasoline by running all of my errands for the week on the same day. On this blog, I hope you will discover some easy, painless ways to lower your regular monthly bills. Enjoy!

3 Questions To Ask Before You Invest In Your Friend's Startup

Finance & Money Blog

So you have a friend or family member who is starting their own company. Now they have approached you about investing in the project. Investing in a startup can be exciting. If the product is innovative and the company is well-run, you could get in on the ground floor of a major opportunity. On the other hand, there's also a real possibility that the company will fail and you could lose your investment. Before you write a check, take some time to research the investment. Here are a few good questions to ask as you begin your due diligence:

What is expected of you? This may seem like a question with an obvious answer. Clearly, the company wants your investment so they can fund operations and growth. However, in startups, the company may also be looking for your participation in the business activities. They may want your knowledge, or they may want your assistance in networking with potential clients or new hires. Additionally, you may be expected to sit on the company's board, which could require regular meetings and a significant amount of time. Make sure you understand everything that you're committing to with your investment.

What is the company's unique value proposition? You may be biased in terms of supporting the new business because it was founded by your friend or loved one. However, at the end of the day, you need to judge the business objectively on its own merits. One place to start is by evaluating the business's product or service proposition. What does the company bring to the market? And what makes that proposition unique and attractive to customers? If you can't see a clear and favorable differentiation between the new company and its existing competitors, you may want to think twice about investing.

What is the runway and burn rate? Very few startups are profitable from the first day of operations. Some don't even have revenue when they launch. It's normal that a new company may burn through cash as it gets its operations and infrastructure in place. The question is just how fast it is burning through cash. Ask for detailed answers on how much cash the company has, how fast it's using the cash, and when it will likely need another round of investment. At some point, you want to see the business stop burning cash and start generating revenue and profit.

For more information, contact an advisor or consultant who assists business investors, such as Seed Equity startup investments. They can help you determine whether the company is a suitable investment for you.


8 June 2016