Meta Pixel

News and Announcements

Capital Raising Alert: 4 Ways Investors Can Lose by Participating – Know the Risks

  • Published May 25, 2023 4:40AM UTC
  • Publisher Wholesale Investor
  • Categories Capital Raising Tips

If you’re a startup founder seeking capital, it’s important to understand that potential investors may be thinking about the different ways they can lose by participating in your capital raise. While you may be focused on the benefits and potential returns, investors may be more focused on mitigating risk. In this video, we explore the four ways investors can lose and what you can do to address these concerns.

YouTube player

The first way investors can lose is through a decline in the overall market. If the economy experiences a downturn, investors may not see the returns they were hoping for, or they may even lose their investment entirely. The second way investors can lose is through the failure of the specific industry in which your business operates. If the industry takes a hit, your business may be impacted as well.

The third way investors can lose is through the failure of your specific business. This could be due to a number of factors, including poor management, insufficient cash flow, or a lack of market demand. Investors will want to know that you have a solid plan in place to mitigate these risks.

The final way investors can lose is through dilution of their investment. If you raise additional capital in the future, your investors’ ownership percentage will decrease. It’s important to be transparent with investors about your plans for future capital raises and how it may impact their investment.

To address these concerns, it’s important to have a clear understanding of your industry and market, as well as a solid business plan that addresses potential risks. Be transparent with your investors about the potential for market downturns and the specific risks facing your business. By addressing these concerns upfront, you can help build trust with potential investors and increase the likelihood of a successful capital raise.

Capital Insights
The Great Life Science Reset: Why the “Sick Care” Model is Failing

The data reveals a significant transition: the end of the traditional sick care model and the rise of a proactive healthcare ecosystem. Learn how smart money is utilising AI to cut drug discovery times in half, transform diagnostics to detect complex diseases in days, and create efficiencies to scale the healthcare system without a proportional increase in costs.

Capital Insights
Australia’s A$4 Trillion Generational Pivot

Australia’s wealth management landscape is undergoing a dramatic transformation. For decades, family offices operated quietly during the “Great Moderation”, an era characterised by low volatility, cheap capital, and global economic synchronisation. Today, that stability has given way to fiscal uncertainty, geopolitical tensions, and intensifying regulatory scrutiny. Yet amid this global turbulence, Australia has emerged as […]

Join over 45,000+ sophisticated investors

Join Now