Why then don’t I just sell some of my companies so I can invest the $500k myself? Well lets look at somebody like Mark Zuckerberg. He may be worth close to $10b but the reality is the vast majority of that is in stock. If Mark tried to sell all his stock at the same time, the market would panic, the share price would drop, and he may get 1/10th of what he would have gotten if he had waited and sold the company for the full value its worth. The same is true if I wanted to sell my companies quickly. I can’t tell you whether I am worth less than $10m or more than $100m, all I can tell you is that I have 45 companies, some very successful and some failures, but I know if I had to liquidate them to raise money I would probably be loosing 90% of the value I have spent ten years creating.
But why ask an investor to risk their money when you could invest your own? Well ultimately an investor is taking an educated bet on an investment. I have been a seed investor in many companies myself, and I know that maybe 1 in 10 will be successful, but you hope that 1 will pay for the rest, and normally it does, otherwise people would not do it!
Ignite needs to raise money, and to do so we have to push everything to the limit including our partners. It may seem that it is unfair to get our partners to take that risk with us, but ultimately business is business and they are taking the risk with us to get a profit in the end. Everything in business is about taking the right risks.