139. Qualities of the Right Investor

VC Minute
It all comes down to people.

VC Minute – quick advice to help startup founders fundraise better.

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Neha Govindraj

I remember getting asked the question when raising our pre-seed: Hey, what are you looking for in a fund? And I just had a template list: “Oh, I’m looking for X, Y, and Z.” But it was just like, I don’t know, do I like you? Like, are you a good person? Okay, great. Then come on board.

And then by the seed, it was, No, I actually need these things from an investor because I’m going to be giving up a meaningful chunk of the business, and I want to know that you’re adding value beyond capital.

But in some ways, I think the fun part about raising the seed is that the stakes are higher and you really know what you want in a partner. You really know who the right people are to have on your side and what you’re looking for in them.

When thinking about who the right investor is for Bonside, the things that were important to me first and foremost were people.

I think building a business is difficult. Building a business takes up a big chunk of your life—a lot of years of your life—and you want to just make sure you’re doing it with people that you genuinely enjoy talking to and feel collaborative with. You don’t feel intimidated by them, but you feel almost elevated by them.

What was important to me was just that organic relationship on that first call and that second call. I’m such a people person that I typically knew on the first call if I was going to have an organic relationship with someone. That was really important to me. And if I didn’t feel like that was there, then it didn’t make sense to waste anyone’s time by continuing it into some sort of conversation.

I would say the second is the ecosystem that the investor has built. And really, that’s another way of saying value-add.

What is the ecosystem of other founders that the fund has built? What is the ecosystem of LPs that the fund has built? What is the ecosystem of resources, if that’s something that they offer or that they’ve built? I’m really getting an understanding of whether that’s an ecosystem that feels synergistic with what we’re building at Bonside.

And I would say that every investor on our cap table today has that. There is some overlap in our ecosystems that makes it a really functional relationship to have them on our cap table.

Rich Maloy

I loved all of the advice this week.

The common thread that I see through all of Neha’s advice is people and relationships. And doesn’t it really all come down to people?

Think about some of her biggest lessons: build relationships ahead of time. Have fundraising friends that are completely outside of your process that you can go to for unfiltered advice. And when it comes down to it, be sure that you have good people on your cap table.

People, relationships, and ecosystems: Build those relationships, create great ecosystems, and work with great people.

I hope you’re as inspired as I am. Have a wonderful weekend. And I’ll see you next week.

About Bonside
Bonside is the first institution created specifically to finance brick-and-mortar businesses. Where venture capital has evolved to suit the needs of tech, Bonside’s structure (based on “Repeatable Revenue Agreements, RRAs) both leverages and encourages the distinct attributes of service-based brick-and-mortars—such as measured growth, repeat revenue, and community involvement. By providing a centralized source of capital and resources, Bonside harnesses the strengths of an age-old yet recently evolving industry in order to empower its modern growth and establish a compelling new asset class for investors.

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