To be a designer, is more about ideas and concept, nothing immediately related to risk in the traditional sense of the word, i.e. adverse positioning of financial investment. Despite this, investors love to be associated with a good success story, and that only happens if risks are taken. And designers are a notoriously risky investment!
Here are ten risks that need to be considered if you are planning to invest or if you, as a skilful designer, are seeking investment.
Investing in the wrong item: Understand what the investment is about! Is it the individual or a product? Investing in a designer is investing in one (or a few) individual(s); the investment is typically not on a specific product or company.
Investing at the wrong time: Is it the right time to invest in this area? Nine times out of ten, investing in an idea ends up being more expensive than profitable as you will have to finance development and production. That said, always research the investment field to ensure that what you are investing in is nearing its peak for profit.
Investing in the wrong market: Is the market ready? Investing too early is a greater risk, if the market is not there yet. Invest too late and you risk missing the boat. Someone else will have already made the profit. Again research the investment field to maximize turnover.
Investing on a non-reliable source: Can you rely on your investment? Does this designer have enough maturity to be consistent throughout the life of the investment? I this case learning all you can about the person/people you are investing in will put you in better stead to minimize risk.
Keeping control of the results and profits: Do you care about the result or about the profit? Avoid anything that could impact profits. Usually the result and the profit have a symbiotic relationship so keep abreast of the investment objectives.
Will the designer deliver? Does the designer perceive the invested money as personal profit or is it clear that it is not “for him” but as an investment. If the designer distances themselves from the investment, perhaps they have less compunction to ‘come through’ for the investor.
Backing up the negotiation with proof: Because the risk is high, do not base the investment on words or information gathered around a nice lunch. Lunches are cheaper then investments. Make sure you get everything on paper and every loop hold checked and tied. Covering your back in investment is sensical!
Working with amateurs: Use a professional negotiator to avoid personal entanglements. Only a professional negotiator can maximize the negotiated investment.
Sticking to your role: Do not become your investment. You invest for profit. You are not the designer. As with the above unnecessary personal involvement, keep your distance from the actual workings of the designer/business you have invested in – this will prevent clouded judgment.
Never invest more: If you stick to you original investment, then you can loose without really suffering. If you increase this amount then you may end up losing bigger than you can afford.
Ensuring all of the above is covered boils down to how your investment negotiation is conducted. More often than not, you will end up having a rapport with your designer, and that is part of the danger! Only a skilled negotiator can help you maintain the necessary detachment required to secure an intelligent investment.
-Simon Vumbaca
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