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This article focuses on an important trait that some investors have: their entrepreneurial background, which allows them to establish strong connections with startups and better understand the “pains” and challenges that new founders face. I would like.
Based on my personal experience as an entrepreneur, I would like to highlight the key aspects of communicating with startups and why your entrepreneurial past makes you a little different from others.
Related: 6 Steps to Finding the Right Investor for Your Business
speak the same entrepreneurial language
Having an entrepreneurial background is very helpful when communicating with founders. Founders sense it in the way the questions are formulated, and often emphasize that such questions have never been asked before. The questions are tailored with a deep understanding of the subject matter.
And it’s not just about technology related topics, it’s also about business management, especially sales funnels, marketing strategy, product market fit and customer development. In addition to managing the business, I have personal experience creating acceleration programs and all the major Silicon Valley methodologies that we have integrated into our accelerators over the years to make them more effective. , can enhance communication between investors and founders.
In my experience of founding 42 accelerators and working with 1,500 alumni startups, I have encountered common patterns, challenges and complexities when working with founders. We have found solutions with startups in the past, and we bring that experience to our current communication with founders.
Entrepreneur then, investor now
Investors with an entrepreneurial spirit bring valuable insight and expertise. They have first-hand experience navigating the challenges and uncertainties of building a business, which allows them to better understand the struggles and aspirations of startup founders. Here are some great examples from the venture world.
Mark Suster is a well-known figure in the investment world and has written extensively on investing in and building startups on his website, Both Sides of the Table. He has a unique ability to argue both sides of the table due to his two-time entrepreneurial experience selling a company to a French company and a company to Salesforce. He is currently a partner at his Upfront Ventures in Southern California (SoCal).
Marc Andreessen is considered a pioneer in the technology field, having founded Netscape, Opsware, Ning, and now his investment firm Andreessen Horowitz. He is an expert on technology trends and a frequent speaker in the angel investing space.
Reid Hoffman is one of Silicon Valley’s most popular opinion makers. He is widely known for founding his LinkedIn, the world’s largest business his social network. Additionally, he has successfully turned his own entrepreneurial acumen into his profitable investments, holding major stakes in companies such as Facebook, Airbnb and PayPal.
RELATED: 5 questions to prepare before meeting with investors
Benefiting from Your Entrepreneurial Past: From Coaching to Strategic Planning
Entrepreneurial investors can provide valuable support and guidance to startups in several ways. Here are some ways such investors can help.
- fundraising strategy. An investor’s primary role is to provide funding to the startup and assist in its future fundraising strategy. This financial support is essential for start-ups to develop products and services, hire talented employees, and expand their operations. Investors can use their entrepreneurial experience to assess startup capital needs and give strategic advice on capital allocation. In addition, we can guide founders towards better fundraising strategies and investor conference preparation.
- strategic planning. Investors with entrepreneurial skills can help startups develop solid business plans and set strategic goals. They bring insights and expertise from their own entrepreneurial backgrounds to help startups identify potential challenges and opportunities. You can work with startup founders to create a roadmap for growth and devise strategies to overcome potential challenges.
- shared perspective. I believe this is one of the most important communication methods. Here’s why. Investors with an entrepreneurial background can better understand the challenges and opportunities of startups. They are likely experiencing similar struggles with funding, market entry, scaling, and operational issues. This shared perspective helps establish trust and empathy with startup founders, fostering better communication and mutual understanding.
- mentoring and coaching. Startups often value investors who not only provide capital, but also act as mentors and coaches. Investors with an entrepreneurial background are well suited to fill this role. They can provide guidance to overcome challenges, make important business decisions, and navigate through the ups and downs of entrepreneurship. Their ability to leverage their personal experience is particularly influential in helping startups succeed.
I love seeing founders so passionate about their startups that our fund goes to great lengths to advise startups, even if they haven’t received any investment from us. You may When rejecting a startup, it’s important to remember that there’s always the possibility of coming back in the future after significantly improving your key metrics. Therefore, it is in our best interest to provide additional advice on what steps need to be taken to raise funds.
I often get personal consultations from founders. We’ve been thinking about how to turn this demand into something useful for startups and society, and we’ve come up with a very good solution. We decided to combine ventures and philanthropy by launching a project called Podari.Life Charity Fund.Lunch with VCs to save lives 30 minutes. ”
relationship building
Investors with an entrepreneurial background can leverage their extensive networks and connections to open doors to partner startups, make referrals and facilitate strategic partnerships. The network helps startups access resources, industry expertise and potential customers.
For example, the CEO of PicUp, one of our portfolio companies, recently visited the United States for the first time. He has taken the initiative to participate in extensive tours, visiting key states and connecting with potential partners and investors. I know firsthand how difficult it is to make new connections in foreign countries, especially the United States, especially Silicon Valley, where the world has no similarities. With this in mind, we decided to help by pre-connecting our company with investors and key players in the Silicon Valley innovation ecosystem.
RELATED: What Successful Leaders Do and Don’t Do to Build Relationships
most important
In summary, it’s not just the investor’s entrepreneurial experience that attracts founders. Rather, their experience in various roles within the company gives investors a broader perspective and helps avoid common mistakes early founders make when building the next big thing. At the end of the day, venture investments are long-term relationships, and we want to partner with people who are likely to work with us for the next 8-10 years before we exit.