How does an Investor Partner add value to your Venture?

In conversations with several successful entrepreneurs I’ve seen how many of them have seen a good investor partner deliver value to their venture. Investors are important stakeholders in your venture and your success creates their success. A good investor understands this and works hard to bring substantial value in whatever way they can. In this article I outline some ways I’ve seen great investor partners add value to the ventures they invest in. It will also tell you the role of an investor in a startup business.

  1. They work with you to build your company’s strategy: An early stage venture evolves through its journey and an investor has usually seen several of such journeys. They bring that know-how to a first-time entrepreneur. They act as coaches, pushing you to question your strategy in the right way and see your blind spots. They also allow you to take a step back and see your decisions from a different perspective, sometimes even pushing you to take risks outside your comfort zone or try new things.
  2. They support you in bringing on board the right people: A great company is made by great people and a good investor knows that. However, convincing great people to join a startup can sometimes be tough. Having a partner who can work with you in building that great team that you need to succeed can be an invaluable value add.
  3. They bring in Industry learnings: Good investors don’t just look at global trends and companies but also develop a deep understanding of the market their investee companies are serving. They also understand their companies’ competitors well. Bringing in that market and industry knowledge is crucial at times of strategic decisions and an investor partner may bring in a perspective that sometimes you may miss out.
  4. They connect you with mentors: Most successful people have had mentors sometime along their journey. Entrepreneurship is usually a lonely path and having someone to consult who had treaded that path before you can be valuable. Early stage investors understand this, and most have networks of entrepreneurs and industry veterans who can guide you at the times when you need it.

So, whether you are looking for investors for your startup or still deciding when to raise money or in discussion with several investors for fund-raising, do think about the value a good investor partner brings to your venture and choose wisely.

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