The Right Investors
Telling people to get the right investors is something that everyone wants so that advice is not exactly earth shattering. I have been thinking a lot about who is the right investor for each company as they raise funds for the next round as the company begins to grow.
This past week I spent time with many of the companies that I have invested in. One is in the education space. Their vision is one where working with universities and colleges will be essential down the line It would make a lot of sense to bring in an investor who really knows and understands the education space. They know the players and are fully aware of how the education space works.
I also spent some time with a company in the animation space. They are working on a variety of things and I honestly had no idea the right advice to give but I did know who would. I connected them and it will help the company as they move forward. Their next investor might be well suited if they are in that space.
Another company that plays in several spaces from hard goods to media to product might be best suited to an investor that is not your typical institutional VC.
We are deep in the throes of a time when so many companies are being built in pretty much every single vertical imaginable. Bringing on an expert (who is an investor) in each space is a tremendous asset. Many of the really large VC firms have multiple divisions from biotech to enterprise to commerce and that is great. Yet there are so many investors out there that are arms of large companies in a particular space or investors such as myself that can be of help to companies as they navigate the waters of the vertical that they are trying to break into and change.
The good news is that the investor pool has truly expanded and there are the right investors out there for each company. You just have to look for them and you should.
Comments (Archived):
Great topic. Identifying those people is the trick. There’s a difference between Expertise and Relationships. I think the entrepreneurs themselves should be the experts, and if they aren’t, then they can acquire that or learn it. But Relationships and opening doors- that is something seasoned investors or board members can provide. You can “rent” expertise, but you can’t “borrow” relationships.
I like that. Can rent expertise and can’t borrow relationships
I agree wholeheartedly but in the real world–at least my myopic piece–people broker relationship with much more frequency than they provide expertise.Selling your rolodex started in the Pleistocene era and continues to this day.
agree and despise “the Rolodex”. threw mine out in 2004. I have relationships. unfortunately they do not scale to .edu investors, which I sorely need. knowing who to go to and getting to them are two entirely different animals.
True, and they will get things done and open doors, then it’s up to the entrepreneur to build their own relationship based on that, to make things happen their way.It also depends on the nature of the “ask”. Small asks can be brokered. Bigger asks are more difficult to get brokered, IMO. They happen via stronger relationships.
We differ so often on language that I can’t figure out if we agree on intent.Trust, networks, expertise and capital is what I bring to my investments and clients.I don’t invest unless I believe but without a doubt I open up my nets to my investments. I’m brokering my trust no matter how carefully I do this and no matter what you call it.I don’t mandate nor can anyone but I–and you do my friend–connect relationships all day long.
I think we agree definitely.but what i’m trying to say relates more to examples of implementation, where I think there are degrees of relationships effectiveness. Sometimes you can really “lean on” someone and have them come through, and sometimes it’s just a referral where the person being referred has to earn their own way into said relationship.
Sometimes you can really “lean on” someone and have them come throughI like the way you put that.
people broker relationship with much more frequency than they provide expertise.Reason is most likely that it takes little effort to do the former but it takes considerable effort to do the latter.
Funny. I think this too. But I have read posts that say, “just get the money, don’t worry about who gives it to you.” I think some investors inside verticals are great-and some are too inside and don’t see what’s going on because they have heuristics in place that don’t allow them to see. This is a great topic-and I agree with William, you can’t rent expertise or networks. I remember when we met in NYC we laughed because we agreed “it’s all about the network.”
it is a mix. some who you never hear from again and some who can really help you out.