The First Crucial Step Towards Choosing the Right Investment Partner

If you’re an entrepreneur, chances are you’re familiar with being stressed out and overworked. Given the nature of your work and the startup culture, there is a near constant flow of tasks, problems, and individuals vying for your attention. Throw an ongoing fundraise into that volatile equation and you may as well write off sleep for the foreseeable future. So how do you make such an important decision as choosing the right investment partner as streamlined and easy as possible?

All Investment Partner Decisions Should Start Here

For starters, it is incredibly important that you go into fundraising knowing exactly what you want to get out of the process. Otherwise, you will be sitting around with your board of directors, pulling your hair out as you mull over different term sheets and prospective partners. Map out your needs and objectives and prioritize them. After all, for for many CEOs and founders, there is far more than valuation that goes into the equation. That small step alone can help to simplify things, not to mention minimize both the internally an externally-imposed levels of stress that can accompany such an important decision. Jessica Scorpio wrote an interesting post for VentureBeat that describes how she and her team were able to navigate the stress-filled event that is a fundraise while keeping their sanity in check. Specifically, there is one point she makes that I think is particularly spot on and that every founder or CEO should take into consideration when evaulating potential sources of funding. She likened the investor selection process to “choosing a life partner — it’s a huge commitment and it’s fine to be very picky”. In Scorpio’s case, they chose investors who were passionate about the same goals as her management team and shared the same vision. Equally important for her team was finding investors who could bring experience, patience, and support to the founders. This tempered and thoughtful approach will in most cases lead to a great relationship with your investors. In fact, it’s exactly the kind of approach that has attracted the types of companies to OpenView’s portfolio that we are now proud to call part of the OPV family. But in order to adopt this approach successfully, it’s crucial that you have a well-developed sense of what you actually want and need prior to engaging with different partners. Otherwise, you are only going to create even more work for yourself. And at this stage, that’s the last thing you need.

Brian Carthas
Brian Carthas
Associate

Brian is an Associate at OpenView where he is responsible for identifying and evaluating investment opportunities for the firm. He currently manages the firm’s analyst program and particularly enjoys assessing new markets/technologies and connecting with passionate founders.
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