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Collaboration: Fundraising Part 4

June 28, 2023
Collaboration: Fundraising Part 4
Written by
Peter Franconi

In this series, we have explored the importance of alignment with investors, the knowledge and network that comes with industry experience, and the value of operating experience. Enter the art of collaboration, a balance between the autonomy to run your business and finding a capital partner who will get you to new heights.

In our years sitting on both sides of the table, we have found that the best way to do this is by finding a capital partner that shares your vision and values. In this blog post, we will explore key considerations and insightful questions to help you gauge the type of collaboration a firm can offer.

  1. Involvement
    Different stages of funding often entail varying levels of investor involvement. Take the time to discuss expectations around engagement and ensure you understand the level of interaction an investor intends to have. It is important to recognize that different investors may have varying capacities to engage, given their portfolio size and other commitments. This will enable you to manage expectations regarding frequency and depth of collaboration.
  2. Network
    One valuable aspect of a collaborative capital partner is their network and industry relationships. Inquire about the connections an investor possesses within your market. These connections can provide invaluable guidance, be potential clients, or offer a fresh perspective on industry trends. Assessing an investor’s ability to leverage their network in ways that benefit your business can significantly impact your growth trajectory.
  3. Hiring Support
    Building an effective team is crucial to the success of any startup. Evaluate whether potential investors can help attract top-tier talent. A collaborative capital partner may have access to a pool of experienced professionals or possess hiring expertise to help you assemble a skilled foundation of employees. Understanding their capabilities in this area can make a significant difference in overcoming talent acquisition challenges.
  4. Sounding Board
    Entrepreneurship is not an easy journey, and founders often are heads down working through the ebbs and flows of their growth. A capital partner that acts as a reliable sounding board can offer insights and best practices to help you navigate complex situations. Their experience and expertise can be invaluable when making critical decisions or exploring new avenues for growth. Assess their ability to provide valuable guidance beyond financial support alone.
  5. Duration
    Consider the duration of the partnership you seek. Some investors prefer shorter-term engagements, whereas others are committed for the long haul. Discuss the investor’s vision regarding the timeline of their involvement and their willingness to provide continued support through subsequent funding rounds. Aligning expectations regarding the investor’s longevity can help you plan for the future and ensure you have a reliable partner by your side.

Before engaging with investors, take the time to identify your priorities and aspirations. Reflect on the level of support you seek. Do you seek a partner who can provide strategic insights, build networks, or assist with team expansion? Answering these questions will help you identify an investor that brings those things to the table.

Head back to the series overview here