Having an investor join you on your journey is very much like getting married. Marriage is a big deal. It’s no surprise that you want to make sure you’re ready for the commitment, but what does that mean? It means making sure both of you are on the same page and have thought through the most basic questions before signing on the dotted line. If this feels like a lot of pressure (and it should!), don’t worry — we have some tips on how to navigate your investor relationships as safely and smoothly as possible.
What we find in a good partnership is often what makes a good investor relationship. So ask yourself, do you want this person and their money in your life?
It’s worth taking your time to get to know investors.
Don’t be bedazzled by somebody making you a great offer to put a lot of money into your company. Spend the time to go the distance and figure out if you are going to be able to work with them. Not only should they put capital in, but they should be helpful too.
It’s important to know that when it comes to “marrying” an investor, there are two things in particular that will make or break the relationship:
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Knowing yourself. What type of investor do you want? How much risk can you handle? What kind of relationship do you want with them?
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Knowing your investors. Who are they really and how have they worked with other people they’ve invested in? Do their personalities match yours well enough for this partnership to work out long-term without too much drama happening behind closed doors (or out in public)? I always find it helpful to try and understand what return profile the investors are trying to make. So I like to ask investors, what kind of return are you hoping to make from this investment? That will help you see if your visions for growth are aligned and if you could meet their expectations.
Before you enter into a marriage, it’s important to know what you bring to the table. Similarly, when entering into an investor relationship, it’s essential that you understand what your investor is bringing to the table and how that affects their expectations of you as an entrepreneur.
Secure an investor, then nurture that bond by spending time together.
Take the time to dig deep with each other on issues that matter to you both. Great investors look like people who are willing to get in the trenches with you and help you think about and talk about solving some of your biggest problems.
They should be opening their networks, expertise and experience to help you solve problems in real time. If you find investors that are expecting you to solve all the problems and have no interest in helping, they are not going to be great partners.
Do you want to tie the knot with Enygma Ventures?
Right now Enygma Ventures’ applications are open for our December round of funding. Check out the Eligibility Quiz at the link below and let’s see if we would make a good fit as partners!
Sarah Dusek
