You may be in a position to re-acquire their equity stake but they will certainly want to sell at the best possible market price.
Venture capitalists don't like bearing the whole burden of risk either. They feel much more comfortable if the management of the business in question is prepared to make an appropriate level of financial commitment to the future success of the enterprise.
The other side of the small-business funding equation is senior debt and working capital. This will invariably be provided by a bank that specialises in this type of sophisticated structured financing.
Sound advice = sound money
So, that's how it's done. But how do you go about raising finance for your small business? As a first step, you need to seek out an introducer.
These intermediaries may be firms of accountants or lawyers with established reputations in the corporate-finance sector or corporate-finance boutiques.
The high street jobbing solicitor you used to convey your house and write a letter to a noisy neighbour is not the right person for the job.
The right introducer will have a track record of successful corporate-finance deals behind him.
The best advice to any company with a funding proposition is to involve accountants and solicitors at an early stage. Companies usually have one chance of obtaining small-business funding and should give it their best shot.
Firstly, professional advisers can bring their wealth of experience to advise on the selection of venture capitalists and other funders most suited to the proposed investment.
Accountants and solicitors see business plans on a daily basis and their expertise and early input in this area is vital if a plan is to stand the best chance of being favourably received.
Seek out their corporate-finance partner and you won't go far wrong. Needless to say there is a price to pay for us highly skilled professionals!
If you plan to play your hand at the corporate-finance table you need the best and most accomplished professional help on your side. It will pay in the long run.
Your introducers will appraise your proposal in detail before putting their reputation behind it, knowing full well that whoever is approached for support will scrutinise the proposal (and you) down to the last detail.
Goodbye
When the cycle of introductions begins, keep a supply of business cards close to hand, say goodbye to your family life for a few weeks and prepare to take the advice your professional team gives you.
The deal process can be long and complex. The equity provider, the bank, the vendor (if there is one) and you will all need to have teams of advisers in place.
By the time the accountants and legal advisers have completed the due diligence process and satisfied the financial backers that everything is in order, the midnight oil will have been burned and weekends lost.
Don't expect a six- or seven-figure cheque to land on your doormat the following morning. It may take weeks or even months to complete a deal for small-business finance.
Your plans for a long break in Barbados will not form part of the due diligence process, however much you think you deserve it at the end of the proceedings.
Remember too, that you will need to adjust to a whole new ethos once you decide to take your own or family-managed business onto the next tier of development.
If you've been accustomed to ploughing your own furrow and taking decisions based on your own intuition and judgement, you may have to make a conscious effort to be accountable to your backers.
By involving outside capital in your small business, you'll be entering a world populated by clever, prudent and committed people whose only role in business life is to provide the fuel that drives industry and commerce: money.
Prove to them that you know exactly where you want to take your business and how you plan to do it and they'll make sure you have enough venture capital in the tank to get you there.
With a bit of luck, you might even build up a long-term business relationship with your equity providers that could prove very useful in the future.
If things go well with your finance providers, you may need to rely on them for funding again as more opportunities arise.
