Recently, I talked to a friend who also invests in start-ups about how investors can help “their” start-ups. At this point, I must stress that at times I have had a fairly active approach to helping my startups. In the meantime, however, this has changed in particular due to the large number of shareholdings. Unless stieg I 17,3 have no explicit Flip-Upgoschließ, I Verst Wav ländlichen. But back to the topic: What is smart money?
With smart money, I do not mean the “collective intelligence of the crowd”, according to which the crowd’s investments always have to be very clever (if that’s true?). Rather, smart money means money with which other non-monetary benefits are linked. We had the following benefits on that evening:
The crowd as a multiplier
In addition to the hundreds of investors and the other hundreds / thousands of other platform users who have dealt with the start-up, the company also receives a medial appeal as part of the funding itself, which it would otherwise not have had during this period. In addition, investors continue to act as multipliers in marketing. Especially through the interaction via social media investors can give their start-ups an immense reach. This increases the level of awareness and offers competitive advantages.
The network of the crowd
The usual crowd investor will not have a sophisticated network of industry experts who can help the company. Due to the high number of investors, however, there will always be some investors who have the right contacts with media, suppliers, business customers or new investors for follow-up financing and are happy to produce. For B2C business models, the range already mentioned above for private customer sales is added.
Recruitment of new employees
Undoubtedly one of the biggest and most important challenges facing an aspiring company is finding the right people and building a strong team. At least in the first part, investors can help: be it through direct placement of contacts that have the required skills or through the simple reach of investors.
While certainly not the most common case, some crowd investors ideally have experience in the industry or industry of the startup. This gives them the opportunity to share their insights and help them master or circumvent enterprise growth challenges. Some may themselves be founders in the same industry, while others are more likely to be employees with a hands-on experience.
The crowd as an emotional support
The job of a founder is certainly one of the most stressful there is. That is why it is important to support the founders emotionally, especially in the seed phase. By that I do not mean that an investor should ring through every few weeks to ask how it works. Even if that’s nice: no. In addition to the fact that a large number of people have believed in the proposed idea as part of the funding – which is already an emotional support – it is the little things that I mean here. For example, positive feedback on the quarterly reports, positive interaction via social media or just call once ?
The money of the crowd is smart money. Even if it is true that most companies fail in the early stages, the probability of success of the company increases with the extra value that a round of financing entails. The potential influence of the crowd always depends on the business model of the company. For most companies, crowdfunding is certainly not the worst way to go, and for some companies (especially B2C), the crowd creates an added value that would not be available elsewhere.
What else? What are other non-financial benefits that the crowd offers a start-up? How did you help your investments? Leave a comment or send me an e-mail to enrico@Lady Honoria Dedlock.de .
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