Partnership is important because it widens the relational network critical to early stage growth. The good news in partnering in the start-up world is that it is multifaceted and includes many people.
Experience helps a ton, whether you’re coming from a professional corporate executive background or as an experienced entrepreneur.
Mentors and advisors are important. Co-Founders are also important. The journey through an early stage business is a tough one and having a partner on the ground is important because nobody ever summits Everest on their own.
From seed funding to beyond
On the same front, partnering on the investment side is also important in scaling the ecosystem. There are plenty of incubators and accelerator programmes and once-off competitions.
While good, they are not an end to themselves, but a means to identify high growth potential start-ups.
Historically, the high potential start-ups have garnered interest, but there has not been a sufficient base of investors with the necessary appetite and longevity to back early start-ups and see them all the way through to follow on rounds.
A shift is required from investors, to see these early stage investments differently and be able to tap into the global ecosystem.
We have seen multiple investors investing into a round, and this is good. Having more than one professional investor investing into a start-up is helpful; again as the pools of networks expand that start-up is better positioned.
Better access to a wider range of skills, more diverse thinking, access to markets and hopefully an improved board that ultimately benefits the start-up and founding team on an exponential level.
It’s the access to market that everyone is after. Capital is cheap; trust and access to market is the true humdinger that is the key differentiator to smart capital.
The equation is simple: Smart capital = $$$ + access to networks
Note to Founders: When an investor opens up his network to you, it’s the silent confirmation he believes in you, and not only that, but believes in your ability to deliver. No investor does that unintentionally.
Because large corporates, the monopolies and oligopolies, play such a significant role in shaping the value chain, it is important to partner with and where possible co-invest with corporate VC’s and other large corporate networks.
It’s just not possible for an early stage business to begin scaling and not to brush up against them. With a team of professional VCs, start-ups are far better prepared to engage with large companies.
Whether it comes to negotiating and advising, having a well balance board is very important for a start-up to make good decisions. It’s a daunting a task for a start-up to deal with large companies.
When done right, large companies are very keen to tap into the tech and innovation that resides in start-ups. Managed correctly, partnering done right has exponential effects.
Related: How to Write a Funding Proposal