Is success looking the same for all?
For founders and investors, success can mean different things, hence the importance of aligning goals and stakeholders at every stage.
📐 Alignment: in 2023, founders prioritized alignment of purpose (36%), network access (28%), and partnership chemistry (28%) when selecting investors. Industry expertise followed at 22%. Meanwhile, VCs placed a premium on reputation. While tenure matters, emerging managers, with their background as angel investors or technology operators, may offer a better fit for founders, bringing a unique perspective and hands-on support tailored to the founders' needs.
🧗♀️ Agility: in challenging economic times, acting swiftly and decisively is crucial. Investors with lean structures can deploy capital more quickly, providing startups with the agility to adapt and pivot away from non-viable business models. This agility ensures stability, ongoing alignment, and greater upside potential for founders.
👥 Stakeholders: for founders, attracting investors goes beyond just raising capital. It's about partnering with those who also offer industry insights, connections, and a vision in sync with theirs. Investors, in turn, seek out teams with the drive, creativity, and execution skills to convert their capital into significant enterprise value. The essence of this partnership lies not just in equity distribution or options pools, but in a shared understanding of objectives, ideal outcomes, and transparent communication at every stage.
In short: every investment in startups is more than a financial transaction; it's part of a business's lifecycle. When growing from 0 to 1, founders can find VC funds that are great at capital formation, know their space and can provide network support. In later stages, challenges often arise when growth deviates from original plans. Venture buyouts present a viable solution here, offering continuation capital and an operator-led approach that steers the business towards sustainable, not exponential, growth.