Venture Capital Funding and the Personality Factor
When a company is deciding which firm they want to partner with for venture funding, there are several factors that come into play. Entrepreneurs consider the past experiences of the firm’s partners and investment professionals, the success of previous investments, potential industry relationships, and the value that can be added through strategic enhancement and board guidance. Firms are sought out for their focus on one or more of these attributes. Our firm, OpenView Venture Partners, differentiates itself by offering strategic consulting services and operational support to expansion stage companies through an in-house team. Many venture capital firms, in the Silicon Valley in particular, tout their relationships with tech industry titans (Microsoft, Google, Cisco, etc).
But I believe that when looking for investors, the entrepreneur’s final decision comes down to one thing: personality. The above-mentioned selling points certainly do come into play. However, when a CEO is deciding which group he/she wants to work with, they need to truly trust and understand the firm’s members. At the end of the day, an investment is a marriage of sorts. The company’s management team and the firm’s team are going to be spending a lot of time together over the life of the investment. They are building a company together. No matter the reputation or perceived advantages, having a healthy rapport with and respect for each other trumps all other factors.