Taking startup business funding can supercharge your growth trajectory and offer a critical factor in improving the odds of startup success. With the right tactics, process engineering, and strategy, most startups can be designed, built, and launched with right-sized boosts from outside capital — but with one caveat: your selection in venture capital partners.
The one piece of advice venture-backed startup founders will offer is that your choice of venture capital partners is more important than you think. Money isn’t the only factor in ensuring success, after all. The most exemplary venture capital partners will provide assists that could prove invaluable when sourcing leads, hires, and resources and when navigating the many obstacles on the startup path.
Responsibilities of Venture Capital Funds
Before you select a VC to partner with, it’s a good idea to vet their expectations in an investment partnership. Be sure you’re in agreement on what their contribution will be after making the investment. Otherwise, you might find yourself with a silent partner despite big talk about involvement prior to their investment. Due to the complicated nature of VC relationships, specifying the roles and responsibilities of your venture capital partner beforehand helps level-set expectations going forward. The following are just a few of the responsibilities founders should expect:
1. Investor introductions.
Venture capital partners often serve as contact generators, helping facilitate conversations with other potential investors in future funding rounds. It’s in alignment for strategic investors, angel investors, corporate venture capital firms, or other venture capital partners to do this.
2. Strategic guidance.
The best VC partners offer a ton of post-investment assistance in the form of strategic guidance. After all, advice and guidance are the primary means of adding value to their portfolios and ensuring a smooth growth trajectory. Make sure their industry knowledge and experience as operators align with your values and business goals. That way, you can expect the right kind of support for your company.
3. Talent acquisition.
Top venture capital partners will have experience building a company. Much like strategic or operational guidance, this can equip them to offer insights around talent acquisition for critical roles — if not introduce key people to hire within their networks. Look for networks that align with the skill sets you need in a team to power your company through its next chapter(s).
4. Customer acquisition.
Although venture capital partners can often help founders close their first customers, customer acquisition efforts can extend beyond this activity. You might ask your financial partners for feedback on your messaging and marketing to provide greater reach and engagement with your customer base, for instance. This will tap into their direct knowledge and experience building a business. Not all VCs provide such assistance, however.
5. Evangelism.
Because their success hinges on your success, you can expect venture capital partners to become true evangelists of your brand — even though you won’t find such a provision in your purchase agreement. How this evangelism manifests depends mainly on the individual. Some will socialize your business within their VC circles, whereas others will work at getting your business mentioned or talked about in publications, blogs, and so on.
Venture capital partners should serve as a reliable sounding board for building your company. They should offer expertise and connections to take your operations from a fledgling company to a successful business. Your choice in venture capital partners is nothing to leave to chance.
Image by Damir Kopezhanov