Choosing the right investment partner
When choosing an investment partner, not only should they be suited to your stage of development and have the right skills for it, but it is also important to know that they are willing to bet on the company through prosperity and adversity.
By Wences Sevillano, CFO at Beonprice
There is a popular quote in the startup ecosystem that goes something like, “choosing an investor is a lot like getting married, except you can’t get divorced that easily”. I don’t know the authorship of the analogy, but I admit I’m not a big fan of it, especially when it appears as a headline in articles on how to choose the right partner to fund your startup. Let me explain.
You can easily, and at the click of a Google button, find some pretty good articles that talk about what to consider when looking for the right strategic partner. It’s not just about money; it’s important to find an investor that fits your stage of development, that has the skills and capabilities to help you cover the value-gaps you may have identified. You have to look at the timing of the fund, its commitment, its reputation, its long-term vision… I am not going to write about this; there is plenty of literature on the subject and it would not bring anything new to the table.
Nor am I going to write about where and how to find the perfect VC. By now, almost all of us know or sense that there is little point in standing still, waiting for that Prince Charming to arrive in the form of a new, absolutely besotted investor, who has seen in us the new and imminent unicorn. As they say in my village, he who wants fish… Of course, networking, permanent contact with the ecosystem, associations, etc., is absolutely essential for success. This is absolutely crucial for the success of the mission. Don’t stand still.
The ideal partner
I said at the beginning of this article that I am not a big fan of the marriage analogy, because who is getting married and thinking about divorce? When we are close to closing a deal with an investor we are excited, enthusiastic, full of energy and excitement. Like someone making preparations for a big wedding. The wind blows at our backs and we draw up a wonderful business plan with fabulous growth. Everything is on track.
Now, there will be bad times in the relationship; as there are in all relationships, difficult market circumstances, and even global pandemics that threaten the very survival of a company. Of course, the last thing you want or expect is a divorce. What you want is for your partners to continue to have confidence in the company, in the team, in the fundamentals of the company to get through the tough times and grow stronger than ever. That’s the kind of partner I want. This is the most critical factor, in my view, in choosing an investment partner.
The Beonprice experience
I wanted to write about this and emphasise it, because although I thought I knew it, there is nothing better than to tell it from the most personal and recent experience. You can imagine that at Beonprice we have had a difficult time due to the impact of Covid. However, from minute one and at all times, we have had the unconditional support of each and every one of our partners. They have shown absolute confidence in the project, in the whole team and in the motto that we had to keep pushing hard in the development of our product, in the design of the service and in the creation of the necessary structures and processes to come out stronger than ever, to improve our competitive advantage and to become the best RMS in the world. Thanks to each and every Beonprice partner, we are not only returning to growth stronger, but we have a bigger success story to tell based on resilience and overcoming.
In conclusion, I would rephrase the quote as follows; “choosing an investor is very similar to getting married and as such, both must rise to the occasion in prosperity and adversity”. Think about this if you are in the process of taking on a new partner. We are proud to have done so and will continue to apply this approach in future stages of development.