The right entrepreneur/investor relationship isn’t just about the money. It’s about the fuel the right backer can bring to a growth business. We explain the difference between smart money and the not so smart, and how the Qodeo platform helps you identify real value.
Whether you’re looking at funding from a venture capital (VC), private equity (PE) or angel/’family office’ source, it’s important they bring value that fuels your growth. It’s what venture capitalist and Sequoia Partner Alfred Lin, who backed the likes of Airbnb, was talking about when he described “capital as fuel”.
The right investor will be the one who offers the smart money, and that applies equally to early and later-stage enterprises regardless of the size of your business or your geography.
What does smart money look like?
Look for the signs. Smart money may deliver contacts that help you grow your business and/or the sales networks that introduce you to new customers. It may come with skillsets that you lack in your business, like technology or engineering expertise, financial management, leadership skills – or legal smarts, like how to file a patent or ‘scale up’.
An investor may be able to steer you towards the talent you need. For example, if you’re a tech startup and you’re regionally-based, you might appreciate advice on how to find specialist marketing and human resources team members to take your product to the next level.
Smart money generally comes with a willingness to spend time understanding your business and an alignment to your long-term vision. Ideally, your investor brings new perspectives and challenges your established views. They want to be involved in a hands-on way, but at the same time, don’t want to take over as CEO. Coaching or mentoring is high value, as are connections to other suitable investors.
Dumb and dumber
While smart money gets you closer to the source of fuel – to the gas station if you like, dumb money might have you breaking down in the middle of nowhere with an empty tank.
The sad truth is, dumb money has the ability to harm your business. If your investor is looking to take control for instance or they aren’t committed or skilled enough to support you in the difficult times. Remember that most investor relationships last longer than marriages – so this union better be “for better, for worse, for richer, for poorer, in sickness and in health”.
Dumb money might block you from hiring great people or ‘exiting’ (selling) your business. Or ask for an equity stake or terms that don’t make sense when you look at the amount of capital on offer, which may preclude future investors from backing you. If they don’t have a lot of experience in similar kinds of investments, or in your industry, or in venture capitalism at all, if you don’t trust them, or if it just doesn’t feel fair – then you should be on high alert.
The smart-money shortcut: Qodeo
There’s always ‘due diligence’ (looking under the hood) to be done into your potential investor, from researching their reputation and their past investments, through to assessing what they offer against the skills you need. As much as vice versa. This can take a lot of a founder’s time. And it’s probably not your area of expertise.
But there is a shortcut. Qodeo is like a dating platform, but for funding. Qodeo’s database is populated by more than 6,000 leading VC and PE firms around the globe (soon to include angel investors and ‘Family Offices’), all of them pre-vetted.
Qodeo uses proprietary algorithms to set you up with best-fit investors, getting you closer to the smart money by identifying skills matches and gaps. Ultimately it means smarter deals are being generated and more smart money invested. And it’s an opportunity for investors to ‘pitch’ to you as well. Qodeo curated appropriate shortlisted investors for you, as your own matchmaker.
Especially if you’re an emerging business, new to venture, or located outside a big city, you have a better chance of truly understanding the profile of your potential investor and learning to speak their language if you’re a Qodeo subscriber, using our easy to understand, standardized dashboards and listings.
Investors benefit from Qodeo smarts too
For investors, Qodeo marks the end of the needle-in-a-haystack approach to finding your next investment. It increases the odds of a perfect match. As one leading US VC terms Qodeo – ‘noise cancellation for the venture community’. Cutting through the noise to connect your smart money to qualified entrepreneurial opportunities instantly, and not just in your current circles.
Qodeo gives you greater access to emerging businesses that may not have otherwise been accessible within your network, dramatically extending diverse, global investment ecosystems. Qodeo can present you with a ranked shortlist of opportunities regardless of whether the company is located in Singapore, New York or southern Europe.
Qodeo’s algorithms filter, rank and match you firm with opportunities automatically; it also allows you to search and shortlist a finessed list of businesses across the globe. At the same time, the platform filters out less qualified deal flow leads to connect you with the right portfolio companies. Though, some VCs find it helpful to peruse their ‘cool’ listed matches for ‘diamonds in the rough’.
Once you’re matched, you can track your matches in real-time (each time they are updated, the algorithms reshuffle), and make direct contact when you’re ready to talk. Qodeo’s dashboards provide simple-to-use, intuitive and standardised profiles for investors to view. And of course, you’re free to reject or accept inbound opportunities.
There are incredible time-saving advantages when you harness Qodeo. Our own research shows that 75% of investors surveyed saved 200 to 500 hours finding their matches through our platform.
And if your chosen entrepreneur has made use of Qodeo’s new Concierge service to enhance and sharpen their profile – ‘matchability’ – you’ll be able to see even more clearly whether their aspirations or raises are too small or just right.
Qodeo levels the playing field for entrepreneurs and helps them avoid the ‘dumb’ money that doesn’t add value in the form of advice or talent. And it empowers the VC community to do business differently – to build the right network more efficiently, to compare opportunities more easily, and to get to market faster with qualified leads that are more likely to deliver results. That’s smart money in action.
It takes just five minutes for an entrepreneur to onboard by signing up and setting up a Qodeo profile, with the first month free. From there it’s 9.95 per month (in most currencies) and 19.95 per month for the premium Concierge service. Sign up to find your smart money match.