How to Know If Raising Investment Is the Right Move for Your Business
- samueljpart
- Feb 26
- 4 min read
Raising investment is one of the biggest decisions a founder can make. In the UK, many early-stage businesses rush into it too soon, thinking that more money will solve their problems. It won’t.
💡 Here’s my stance: Investment is only right for businesses with a proven formula.
What does that mean?
✅ You’ve tested your strategy, and it works. You know that putting X money in leads to X+ money out in a predictable way.
✅ You’ve identified a clear market opportunity. The demand is there, and growth is only limited by funding.
✅ You need investment to accelerate a winning formula. Not to “figure it out.”
✅ You are aligned with the idea of investment. Ie you are motivated to repay the investors by selling or creating an exit opportunity for them. If you aren't then you should grow your busienss organically.
If you don’t have this proof yet, you shouldn’t be raising money. Instead, you should focus on refining your product, validating demand, and proving your model.
So—is your business ready for investment? And if so, what type of investor is right for you?
1️⃣ Is Your Business Actually Ready for Investment?
Before seeking investment, ask yourself:
📌 Have we proven our model works?
Are we generating revenue?
Do we have repeat customers?
Can we predict what happens when we invest in marketing, sales, or product development?
📌 Do we have a scalable market opportunity?
Is the demand large enough to justify investment?
Will funding significantly increase growth, or will it just cover costs?
Are we already profitable, or do we need funding just to survive?
📌 Is our strategy investor-ready?
Can we show clear financial projections and growth plans?
Have we tested our business enough to reduce risk for investors?
Do we understand what investors expect from us?
🚨 If you can’t confidently answer these questions, you’re not ready for investment yet. Your next step should be building a proof of concept, launching an MVP, or refining your business model to get the answers you need.
💡 Where I can help: If you're not sure where your business stands, I help founders identify what’s missing before seeking investment—so you don’t waste time pitching too soon.
2️⃣ What Type of Investor Fits Your Business?
Not all investment is the same. Different investors have different motivations, expectations, and risk tolerances. Here’s where your business might fit best:
Investor Type | Typical Investment Size | Who They Invest In | Key Motivations |
Angel Investors | £10K - £250K | Early-stage, high-potential businesses | Passionate about startups, may offer mentorship |
High-Net-Worth (HNW) Individuals | £50K - £1M | Businesses with strong potential but still testing growth | Diversifying their investments, often personal interest-driven |
Small VC Networks | £100K - £1M | Businesses with early traction & scalability potential | Looking for strong financial returns within 5-7 years |
Venture Capital (VCs) | £1M - £20M+ | Rapid-growth, high-risk, high-reward businesses | Aiming for big exits (acquisition or IPO) |
Family Offices | £500K - £50M+ | Established businesses with long-term potential | Seeking stable, high-value investments |
Private Equity (PE) | £10M - £100M+ | Proven, profitable businesses | Restructuring or scaling mature businesses |
💡 Where I can help: If you don’t know which investor fits your business, I help founders map out their growth plan and connect with the right funding sources.
3️⃣ Are You Ready for the Shift in Your Role?
Once you take investment, your job completely changes.
🚨 Most founders don’t realise this: Raising investment isn’t just about money—it’s about commitment to shareholders.
📌 Your new role as a founder becomes:
Managing investor relations. Reporting results, updating shareholders, keeping investors engaged.
Constant fundraising. If you take VC money, your next step is often another round.
Executing at speed. Investors expect rapid growth—not slow, organic progress.
🚨 If you’re not prepared to answer to shareholders and shift your focus from running the business to managing investment, then raising money may not be the right move.
💡 Where I can help: I help founders weigh up the realities of raising investment vs. growing through revenue—so you know what’s best for your business.
4️⃣ Investment-Backed vs. Sustainable Business Growth
Not every business should raise investment. Some are better suited to organic growth through revenue.
🚀 Businesses suited for investment: ✅ Tech start-ups with scalable products (apps, SaaS, marketplaces). ✅ High-growth brands that need funding to capture market share fast. ✅ Businesses with clear exit plans (acquisition, IPO, buyout).
💰 Businesses suited for organic growth: ✅ Service businesses (agencies, consultancies) where investment isn’t needed to scale. ✅ Lifestyle brands that founders don’t want to sell or exit. ✅ Businesses where growth can be funded by revenue, not external money.
💡 Where I can help: If you're unsure whether investment is right for you, I help founders build business models that generate sustainable growth—investment or not.
Final Thoughts: Should You Raise Investment?
Investment isn’t for every business. If you haven’t yet:
🔹 Proven your product, market, and strategy
🔹 Validated your business model with real data
🔹 Identified the right type of investor for your business
…then it’s too early to raise money.
Before pitching, focus on validating your business. If investment is right for you, your business plan should already prove X money in = X money out, plus growth.
Need help getting investment-ready?
📅 Book a free 30-min call, and let’s map out your path to funding.
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