Mika
VIP Contributor
Do you know what the common factors of all successful start-ups are? These start-ups use a strategy called OPM.
OPM is the abbreviation of Other People’s Money
Successful start-ups get money from
Angel Investors
Venture Capitalist
Common people through IPO
They use other people’s money in their business and become successful.
Generally speaking, there are two major benefits of OPM.
When you fund your project through a bank loan, you will have to pay interest. It does not matter whether you are successful or not, you will have to pay interest every month, for many years. However, when you use investors' money your investors will not only bear profits but also losses.
When you fund your start-ups through burrowed money, you will have to return the money. Lenders will never care whether you are doing good or not. However, when you get money from investors, you do not have to return the money even when you encounter a loss.
OPM is the abbreviation of Other People’s Money
Successful start-ups get money from
Angel Investors
Venture Capitalist
Common people through IPO
They use other people’s money in their business and become successful.
Generally speaking, there are two major benefits of OPM.
When you fund your project through a bank loan, you will have to pay interest. It does not matter whether you are successful or not, you will have to pay interest every month, for many years. However, when you use investors' money your investors will not only bear profits but also losses.
When you fund your start-ups through burrowed money, you will have to return the money. Lenders will never care whether you are doing good or not. However, when you get money from investors, you do not have to return the money even when you encounter a loss.