Why Your Next Investor Should Bring More than Just Money

When considering potential investors for your business, it’s easy to focus on the capital they bring to your venture and stop there. The truth is that investors can invest in a number of ways, and money is only one of them. If they are committed to the success of your startup, they should also come ready with appropriate connections to their network. These connections can be just as vital, if not more, to the growth and success of your startup.

It’s impossible to overstate the importance of networking in the startup world. Key connections make it possible to secure funding, get priceless advice and consultation, and expand or adjust your initial vision for your startup so it can thrive in the marketplace. When it comes to the success of a startup, you could almost say that it takes a village.

Why a Strong Network Matters

Your startup depends on two things that are inextricably linked: funding, and a solid network. Of course, your funding depends on your network and your access to potential investors, consultants, and customers. In many ways, this makes your network even more important than funding, because it’s what makes funding possible. As a founder, you likely understand this on an intuitive level.

The question is whether you are allocating the proper amount of effort to developing your network beyond incidental connections. It’s easy to get caught up in the operations of your startup, and preparing for pitches and research are essential to your business. However, networking is something that we can easily put just a notch about socializing. Because it has to do with people rather than numbers and dollars, it can sometimes fall lower on the list. In fact, your other efforts will be wasted if you aren’t paying real and serious attention to your network and actively developing it.

The good news is that network growth can and often is exponential. Meeting a great connection will almost always lead to other connections, giving you access to their networks as well. One of the best ways to see growth in this area is to hire a strategic advisor who specializes in startups. These advisors have made it their job to know the right and connect the right people. By adding an advisor to your team, you are at once tapping into their substantial networks as well as intel on who may make a potential investor or collaborator.

Advisors can support your network growth while you focus on other tasks, particularly the more urgent ones that can’t be delegated to anyone but a founder. They can also provide insight into what active efforts you can make to better connect with the right people. Networking is not just for the extroverts. It’s a skill that can be coached, learned, and practiced. With the right advisor, you can become a pro at meeting the right people, even if it hasn’t always come naturally.

How An Advisor Leverages Their Network for Startups

When you understand how important your network is as a founder, you can appreciate the investment that a solid network requires. As we’ve discussed, one of the best ways to prioritize network growth and open up new opportunities in your network is by hiring a strategic advisor. Because they specialize in working with startups, they will already be connected to key potential investors, clients, partners, and more.

Adding a strategic investor to your team of leaders is a solid and efficient way to invest in your network growth. Advisors work in putting the right people in the same room. This means that in working closely with you and understanding your business, an advisor will be able to point you in the right direction within their own network. A well-timed introduction to the right person can dramatically change the trajectory of your startup—all it takes is one. But an advisor will be able to connect you to multiple people who can help take your business to the next level, not just one. They’re able to save you countless hours that you undoubtedly need for other tasks in your business by introducing you directly to the right people.

Advisors can be some of the best resources for connecting with potential investors. They will have a deep understanding not only of an investor’s past projects, but their personal and professional interests. They can significantly streamline your investor identification process, quickly creating a short list of great candidates.

Remember that simply knowing of a potential investor is not always enough in a competitive and saturated industry. A high-quality introduction can make all the difference. Your advisor will have existing relationships with their network, meaning that any introduction they make doubles as an endorsement. In a world where everyone is desperate to shake hands and rub shoulders with the right people, making a trusted connection is the best possible thing you can do for your startup.

The Value of Mentorship

Solid networks offer more than funding opportunities, they should also give you access to important mentorships. As we mentioned at the beginning, an investor should be investing more than money. They should also be ready to share relevant experience, time, and support to help your startup get to its next milestone.

Mentorship can come through a number of avenues. Investors who are keen to mentor are an invaluable resource of your business; it demonstrates that they are truly committed to the startup and to seeing it thrive. Much like sharing their networks, this show of support ensures that they are truly acting as in investor and putting the best of what they have to offer towards your venture.

Likewise, an advisor can provide excellent mentorship in a variety of areas. They can offer insight into areas through the lens of their experience with other startups, whether they are in your industry or not. This kind of support is often more valuable than even funding itself, because it allows you as a founder to better utilize your funding and strategize for ways to access additional capital. As founders, it can be easy to fixate on the dollar amounts that your business is generating from investors and customers.

Through mentorship, you can rebalance your approach for long-term success. Funding is just one piece of the puzzle. Startups that succeed rely heavily on support from their advisors and investors, trusting that they have surrounded themselves with knowledgeable and experienced people. It takes an entire network to get a startup off the ground. Each investment you make into developing your network will always pay back in dividends, whether that includes money or not.

Like networking in general, the impact that mentorship can have shouldn’t be overlooked. As an entrepreneur, there are many ways that your work will break the mould. However, having experienced and invested supporters in your corner to advise you can significantly improve your processes and cut down on unnecessary trial and error.

Invest In Your Network

Are you wondering if your startup would benefit from additional networking efforts? Regardless of whether you’re in the planning stages or have already done several rounds of funding, the important of networking can’t be overemphasized. It’s likely that you could be doing more to develop your network. A surefire way to streamline your network growth is to bring in a trusted advisor. Not only will this grant you access to a wide and relevant network, it will also open doors for funding, mentorship and partnership opportunities, and potential clients.

It’s never too early or too late to put time into your network. Book a free discovery call with me today: Book A Call