Silent Business Investors: Why They Choose To Remain SilentEntrepreneurship Monday, October 6th, 2008
The terms “Silent Business Investors” refers to the investors who don’t participate in day-to-day management activities of an organization. If you understand the terms like ‘Dormant Partners” or “Sleeping Partners,” you can easily understand what a silent business investor is. These investors generally have financial capabilities to invest in business but does not want to get involved in running the same. The question is why would some one chose to be a silent investor and should you really chose to have such investors in your business.
There are various reasons for individuals and organizations being silent business investors such as:
- Not having time to participate in management activities
- Not being able to culturally fit into the organization
- Not having the understanding or core competency to run a certain type of business
- Not willing to come out publicly as being associated with a particular organization
- Maintaining confidentiality of financial capabilities and status
Often investors provide more than just money; they provide leadership support, guidance, connections etc. It is said that if you are an organization which lacks capabilities in terms of leadership, networking, business guidance etc. you should look for business investors who will be available for help with more than money and whenever you need them. However, if you have everything to run your daily business, you can leverage silent business investors to fund your efforts.
In my view, funding is never bad, if it comes at a right cost. Even if you do not have organizational capabilities and you are only able to get silent investors to put money, go ahead and take it. Once you have money, you should be able to build those capabilities in business by hiring the right set of people and the money will help you do that with ease.
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