The Essence of Raising Smart Money
Smart Money is the type of funding any founder today should be looking for. Not only because of the inherent challenges of launching a startup and making a novel business model work, but also because founders ought to spend their time doing what they do best – building the business. No founder wants to find themselves in a situation where they have early-stage investors expecting them to do all the work (down to the detail) and waiting on a solid ROI next year (dividends please!). There is a lot of capital available out there and knowing which one is the right one for you, your startup and it’s growth stage is key. As a founder, you are the captain of your ship, and your crewmen expect you to make the right choices so things work out well in the end. In general, we always focus on investors that can add a little bit more than just a big check so to speak.
Smart Money Investor #1: Network makes the dream work!
Doing business development is key for any startup. Many of us have sent an email waiting ages for a reply. However, knowing someone on the inside always helps to expedite things. Especially if what you’re looking for is partners and key sales accounts for example. Thus, this type of investor is someone that has built a considerable network that is relevant for your startup and its growth. As such you could greatly benefit from introductions on behalf of the investor to get things going. It certainly beats having to cold call or email someone, and breaking the ice.
Smart Money Investor #2: Experience always trumps inexperience!
This would be someone or an organization that has a built some solid industry experience over the years. Obviously, you’d only want to get tin touch with them if their expertise and your needs are a match. Such an investor can help spot problems early-on and have a significant impact on your Go-To-Market-Strategy along with its execution.
Smart Money Investor #3: A founder’s best advisor is…another founder
This investor has done it before. Think about startups that made it into the big times. The founders and co-founders of these startups have been through it all and their startup experience, knowledge and growth hacks can probably save you tons of hours of trial and error, having to learn things from scratch or just searching for answers. This type of investors can be one of your best advisors as they have been in your shoes before – literally. As such, if the chemistry is there, you can count on having a great supportive investor that is actively looking to help grow the business and possibly help solve some issues.
Smart Money Investor #4: The resources with the sources
This investor could be a corporate investor or a firm or person with specific resources you made need in terms of skills, or tangible things such as a lab, office building, hardware equipment etc. These may be expensive to acquire on your own, thus such an investor can help you hack away into things quicker. Corporate investors are often times on the lookout for innovative startup business models that can fit into their strategic growth objectives. Hence, if there’s good interest from their end it might be worthwhile taking it into consideration as they probably have lots of assets (including cash) available to make the dream work.
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