Should a Startup Hand Over Control to an Investor?

Guest Writer
Entrepreneur, Business Planner and Angel Investor
min read
Opinions expressed by Entrepreneur contributors are their own.
It sounds as though you're being asked to sell a controlling interest in your business for $1,000. Is that all you're worth? That sounds like a no-brainer. I wouldn't give away a 55 percent interest in a used car for $1,000, much less a business.

Here's the question: Is this friend someone you want as a partner -- forever? Is he going to do half of the work? Is he so smart or so hard working or so capable that you're happy to take only 45 percent of the business just for having him also involved in it? If that's the case, it's not about the money so much as the two of you starting a business together. If you want to be equal partners, then be equal partners.

But don't do it for $1,000. There are a lot of better ways to find $1,000 than giving away half ownership in a company. If he's not going to do half of the work, borrow the money from somewhere else. There's no way you'd even consider giving ownership in a business for $1,000. Absolutely not.

Related: How to Find the Right Investor for Your Business
Related: Don't Give Away Ownership Easily

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