Should I take the money or put it back into the business?

Dear Aunty B,

My business is a year old, planning a capital raising and want to partly use the funds to pay back loans to the business from my partner and myself. We have had advice from one investor that this is not a good idea. What do you think?

Hopeful,
Victoria

Dear Hopeful,

Your problem is this. You are a start-up and you should be taking the risk and putting up the money. The last thing an investor wants to hear is that you are taking their money to pay yourself back, leaving them in your business with all the risk. You need to seriously think about leaving your money in the business.

Your message to the investors should be that you believe in the business so much you are leaving the loans in place and your big focus is on helping investors get a return on their investment.

Be smart,
Your Aunty B

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