Can someone in the house throw more light on this since we were thought that as an entrepreneur, private investment is not the answer to our problems but it is only a tool we can use?
Hello Oyeladun, you asked an important question. Indeed private investment is not the answer to entrepreneur’s problem but a resource tool to help entrepreneurs achieve their aim.
Basically, funds are instrumental aspect of starting or supporting an existing business. Many experts tag funds as the blood life of any business. While this is true, it has become common for entrepreneurs to have a narrowed focus on raising fund for their venture even when the time is not reap for such. I think that is the main reason this week’s lesson teaches us that Private Investment is not necessarily the answer to the problem facing an entrepreneur but a tool. However, there is a time to sort for private investment. Before the time to sort for private investment, there are basic business management activities that should occupy the mind of an entrepreneur and not necessarily funding. These business activities include trying to really know:
- the customer’s problem,
- your competitors
- the market size
- your customer segment
- the required solution(s) to the client problem
- your physical brand representation
- how to structure your business and
- how to start building clientele.
This list could continue. The solution to the problems embedded in the list above should be the main problem.
When the time is reap to sort for outside investment like the private investment, the fund could come naturally because the basic problems would have been dealt with. According to Cambridge dictionary (2020), private investment are “money invested by companies, financial organizations, or other investors, rather than by a government.” These monies from private investors are planned to be recovered with profit for the investing company. This is the main reason private look out for bolstering and promising businesses or ideas to invest in. Setting up your business and running it if possible would give you a potent bargaining power when its time to involve private investors. This is the main reason they are not solutions to your problem but a tool to be used when the time is reap. It is important to also add that not every business designed for private investment.
I hope my comment helps.
Share your views.
Cambridge Dictionary (2020) “Meaning of Private Investment ”, [Online] Link: https://dictionary.cambridge.org/dictionary/english/private-investment (Accessed: 1st July 2020)
Thanks Osiri, I appreciate your comment it is really helpful