Mapping the Ideal Qualities of Your Perfect Investment Partnership
So you’ve decided you want to raise capital. Great. Now what? How do you go about that process? Where do you start?
There are plenty of different routes to take to forge an investment partnership:
- Prepare your investment pitch
- Finally return the calls and emails from the countless investors who have been reaching out to you
- Reach out to people within your network for introductions
- Speak to other CEOs who have successfully raised capital to see how they went about it
- And multiple other options…
In my personal opinion, before even thinking about any of the above, you should sit down with key members of your team to understand why you are raising capital and what each member of your team is looking to accomplish through a capital raise. Have a whiteboarding session where everyone can contribute thoughts on how an investor can add value to the business. By having an open dialogue with your team, it will quickly become evident which factors and qualities your team values most in a potential investor. You can then use this session as a jumping-off point to find your ideal partner. Chances are you are not simply looking for cash – if that was the case, there are LOTS of options out there. You want someone who can bring meaningful value to the table that goes well beyond their dollars. By establishing a list of qualifiers, you and your team can quickly hone in on the smaller group of firms who are right for your company and easily ‘cross off’ firms that are not a fit.
One of my favorite questions to ask CEOs is “What would your ideal partnership look like?” This is not the same question as “What would your ideal deal look like?” While the latter question is important and relevant, an investment won’t get done unless the deal terms make sense for both sides (i.e., the risk/reward is reasonable for all parties). The “ideal partnership” question can be answered with a little bit of prep work from you and your team – by huddling together, you can figure out what is most important to a successful relationship and share that with the potential investor.
Once you figure out what you want to get out of your investment partnership, the rest is “easy!” Decide on the right amount of the capital raise, prepare the appropriate materials, and start talking with potential investors – by doing some homework, you can get past the fundraise stage more quickly, and get back to the stuff that matters: RUNNING YOUR BUSINESS!