There is No Such Thing As Dumb Money, Only Dumb Investors

Let's say you have an idea for a small business, but you don't have enough of your own money to get it off the ground.

If you are really determined to start your small business, and you really believe that it is going to be successful, then the next step would be to try to borrow money from a bank and/or raise money from investors.

If you decide to raise money from investors - and they could be people you know, or people you don't know - you will ask yourself, how much do money do I need, when do I need it, and what am I prepared to give up for it, among other questions.

But, perhaps, by now, you have heard the popular distinction between "smart money" and "dumb money", and you are wondering, how will I know the difference.

I think that all money has the same I.Q.

It's the investors who can be smart or dumb.

Here are three chracteristics of a "smart" investor for your small business:

1) a smart investor totally understands the concept and the mission of your business

2) a smart investor respects and shares your passion and commitment to your small business

3) a smart investor knows that it takes 3-5 years to build a small business into profitability

And a dumb investor?

1) a dumb investor invests money in your small business without understanding your concept or mission

2) a dumb investor has no passion or commitment to your small business and will abandon it at the first sign of trouble

3) a dumb investor thinks he or she knows how to run your small business better than you do, without any experience in that business

I don't believe that there is any such thing as "dumb" money. But a "dumb" investor can turn your dream business into a nightmare.