How to Assess Strategic Value of Startup Investors

Many founders become excited when a corporate venture capital (CVC) team reaches out. It feels like validation. Big company interest. Maybe even future partnership potential. But here’s the catch: not all CVCs are created equal. Many of them fall into what is called “innovation theatre”—all optics, no real action. Here’s what founders should look for when talking to a CVC: ✅ Curiosity at the top If senior execs aren’t involved, the CVC is likely a side project. The best CVCs are backed by leaders who want to learn from founders. ✅ Operator-Investor-Insider teams Great CVC leaders have walked the walk. They've raised capital, sat on boards, and know how corporate systems work. If the person you’re pitching has no startup scars or no board-level pull internally, that’s a red flag. ✅ Real governance = real impact Ask who they report to. If the CVC team doesn’t have access to the CEO or a seat at the strategy table, your deal might not lead to anything meaningful beyond a check. ✅ Strategic capital over financial return Unlike traditional VCs, good CVCs aren’t just chasing IRR. They’re placing bets that help the parent company shape its future. If their investment thesis doesn't directly tie to the product or roadmap impact, be cautious. ✅ They activate, not observe Insight is cheap. The best CVCs don’t just gather market intel. They turn it into internal action—pilots, partnerships, integrations. If they don’t push the parent company to act, you're just giving them free consulting. ✅ They don’t ghost during downturns Strong CVCs are built to withstand even the most challenging times, even when budgets are tight. Before signing anything, understand how committed they are in the long term. Is there a multi-year strategy? Do they have protected capital? Examples of great CVC platforms (in alphabetical order): 1. Applied Materials/Applied Ventures 2. AXA 3. Hanwha Impact Partners 4. Intel Capital 5. LG Technology Ventures 6. Munich Re 7. Qualcomm Ventures 8. Samsung Ventures, Catalyst, and Next Funds 9. TDK Ventures Founders: When corporate money knocks, don’t just look at the size of the check. Examine the structure, culture, and power dynamics within the team. A good CVC can make a significant difference for you. A bad one will waste your time and cap table. What has your experience been like with CVCs? 🌱🤝🌍 Nicolas Sauvage, Dong-Su Kim, Albert Kim, Brendon Kim, Quinn Li #startups #venturecapital #founderlife #CVC #growthstrategies #corporateventurecapital #productmarketfit #strategy

NOT ALL CAPITAL IS GOOD CAPITAL When you’re on the hunt for capital, it's vital to consider not just the financial investment but also the strategic benefits that potential investors bring to the table. Here are essential attributes to seek:   Aligned Vision and Values: Select investors who demonstrate a strong alignment with your startup's long-term goals, particularly concerning control and valuation. They should have realistic expectations for your company’s growth and be prepared to support you through its inevitable fluctuations over the long-term. This alignment ensures they are true partners interested in sustainable development, rather than quick returns. Domain Expertise and Network: Opt for investors who offer more than financial support by providing valuable industry-specific knowledge and operational experience. Their well-connected network should facilitate access to additional fundraising opportunities, strategic partnerships, and critical resources like top-tier talent and cutting-edge technology. Such intellectual and social capital is indispensable for accelerating your startup’s development and enhancing its market position. Financial Credibility: Choose investors based on their financial stability, evident from their historical funding activities, current reserves, and provisions for follow-on investments. Their ability to provide consistent support during critical phases such as scaling operations or entering new markets is crucial. This stability ensures they can back your startup effectively when it matters most. Experience with Similar Stage Companies: Seek investors with a proven track record of guiding startups at similar developmental stages. Their familiarity with the challenges and needs of your growth phase can offer invaluable pragmatic advice and support. Such experience not only helps in navigating ups and downs but also in making strategic decisions that can be pivotal to your startup’s success. #startups #entrepreneurship #founders #venturecapital #venturedebt #funding #capitalraising #fundraising #startupfundraising #startupfunding

Founders: before you pitch a VC, make them pitch you. The best founders I’ve worked with never just take the meeting. They ask sharp questions — because they expect capital. They’re deciding who earns a spot on the cap table. Here are 5 questions I’d ask before pitching any fund — and what their answers actually mean: 1️⃣ “What’s your value add — beyond capital?” This flips the script. Great founders want more than a check — they want leverage. Ask for specifics: → What intros have they made this month? → Who actually supports the portfolio — and how often? → Can they name a founder they actually helped post-investment? 2️⃣ “What does your diligence process look like?” Founders waste weeks chasing ghost processes. Don’t. Make them lay it out: → How many calls? → What docs do they expect? → Who gives final sign-off? Once they commit to a process — hold them to it. 3️⃣ “How many new deals are you targeting this quarter?” This tells you if they’re actually investing or just “taking meetings.” If the number is 1 or 2, and your round isn’t urgent for them… That’s a signal. (Especially if you're early and they’re deploying late in the fund.) 4️⃣ “How do you usually work with founders post-check?” You want alignment — not surprises. → Do they do monthly calls? → Are they active on hiring, GTM, or board management? → Or are they just a name in the investor update? Neither is wrong. But you deserve to know. 5️⃣ “How do decisions get made at your fund?” You’re mapping power — not just enthusiasm. If they say “I love this” but can’t bring it through IC without another partner on board, that’s key context. Bottom line: Fundraising isn’t just about pitching well. It’s about qualifying your partners. Ask better questions. Get better investors. #VentureCapital #VC #Startups

Capital always comes with strings attached. Not all capital is created equal. Dollars are not dollars are not dollars. That’s as true in venture as it is in philanthropy. If you've ever worked with major university endowments, you know what I mean: almost all gifts are restricted. They might look the same on the balance sheet, but behind the scenes, there are strings, clauses, and committees. The same principle applies to early-stage startups, albeit at a smaller scale. 💸 VC dollars rarely come with legal restrictions, but they carry cultural ones. Ask any founder who walked into a board meeting confident in their roadmap and walked out rewriting it. 🔹 According to Carta, the average seed-stage startup gives away 20-25% equity in their first priced round. That’s meaningful ownership to surrender - especially if the capital doesn’t come with value beyond the wire transfer. 🔹 In a recent Crunchbase analysis, nearly 70% of startups that raised a Series A had to clean up cap tables or restructure boards. Translation: misaligned early investors can create drag compounds. 🔹 And here’s a datapoint worth pausing on: over 50% of U.S. family offices now invest directly in startups. That can be a good thing, or not. Many don’t follow venture norms, which can lead to misaligned expectations, unusual governance asks, or just general confusion on both sides of the table. So what can founders do? 👉 Ask what’s actually in the check. Is it real strategic value - introductions, hiring support, insight - or just a like on LinkedIn? Is this a partner who will support your vision or one who thinks they should be running the company? Is this the beginning of aligned governance or governance theater? 👉 Treat your cap table like a carefully built system. Keep the high-value players. Buy out misaligned ones when you can. Optimize continuously - cap tables evolve like companies do. Capital isn’t free. But it can be smart. Choose your investors like you’d choose your co-founder: thoughtfully, intentionally, and with long-term alignment in mind. It might make all the difference.

Choosing the right investors can make or break your company. When you’re fundraising, it’s tempting to take the first signable offer you get. In a tough funding environment, just getting any deal can feel like a miracle. But choosing the right investor is about much more than just the capital. Here’s how to evaluate investors beyond the dollar amount and find the right fit for your company. 𝟭. 𝗗𝗲𝘁𝗲𝗿𝗺𝗶𝗻𝗲 𝗬𝗼𝘂𝗿 𝗜𝗱𝗲𝗮𝗹 𝗣𝗮𝗿𝘁𝗻𝗲𝗿𝘀 It’s crucial to know what kind of investors you’re looking for before you start seriously negotiating. Not all investors are equal, and not all will add value beyond just cash. Questions to consider: - Do you want an investor who has operational experience as an entrepreneur? - Would it help to have an investor who’s an expert in a specific industry or region? - Are you looking for someone with a deep network of other investors, potential customers, or prospective employees? - Would you prefer a partner who actively mentors the founding team, or someone more hands-off? Also consider the firm’s brand and operating resources. Some firms have entire teams dedicated to helping portfolio companies with hiring, strategy, or product development. The firm’s reputation alone can also be a powerful signal to future investors and potential partners. 𝟮. 𝗘𝘃𝗮𝗹𝘂𝗮𝘁𝗲 𝗘𝗮𝗰𝗵 𝗣𝗮𝗿𝘁𝗻𝗲𝗿 𝗜𝗻𝗱𝗶𝘃𝗶𝗱𝘂𝗮𝗹𝗹𝘆 The first thing to realize is that not all money is equal. The most valuable investors bring much more than capital: they bring expertise, connections, strategic support, mentorship, and more. Questions to consider: - What value does this investor bring beyond capital? - Have they invested in similar companies before? - Do they have a strong network in your industry? - Are they known for helping with hiring, strategy, or partnerships? - If they were not investing in the company, would you want to work with them? Do Your Own Reference Checks It’s entirely reasonable, and recommended, to ask a VC for references. Reach out to founders from their previous investments, especially those that didn’t succeed. Understanding how they handle failed investments can tell you a lot about their character and support style. 𝟯. 𝗘𝘃𝗮𝗹𝘂𝗮𝘁𝗲 𝗘𝗮𝗰𝗵 𝗙𝗶𝗿𝗺 𝗮𝘀 𝗮 𝗪𝗵𝗼𝗹𝗲 An investment partner is part of a larger firm, and the firm’s brand and resources also matter. Sometimes, the operating team or the firm’s network can provide more value than the partner themselves. Questions to consider: - Who else at the firm will be involved with your company? - Does the firm’s brand and reputation align with your company vision and stage? - How will this firm’s involvement signal your momentum to future investors or partners? Be cautious if the firm’s values or focus areas don’t align with your own. Taking money from a high-profile firm might look good on paper, but it can backfire if they expect you to shift strategy to fit their portfolio. Read the whole post here: https://lnkd.in/ewzbkpUd

The #1 mistake founders make when raising capital? Thinking money is enough. When I raised capital for the first time… I thought money was money. Take the check. Say thank you. Keep it moving. I didn’t know what strategic value meant. And most first-time founders don’t. Here’s the fix: Don’t ask who wants to invest. Ask who can help you win faster. Example: • You need 6 more enterprise deals. • You know who they are. • You’ve closed 4 already. • You have product-market fit. • You just can’t get in the room. Now ask: • Who has those relationships? • Who can unlock that market? • Who can create $20M in value just by helping? That’s your investor. Let them buy in. Give them access to the upside they’ll help create. Strategic capital isn’t just about the check. It’s about the outcome that comes with it. So if you’re raising without needing to… Think carefully. • What doors can’t you open yet? • What ops move are you blocked on? • Who knows how to break that logjam? That’s your capital partner. Not the one with the biggest wire. The one who removes the biggest barrier. ________________ 👇 Stay ahead of the $37B youth sports disruption. The Youth Sports Investor newsletter drops 1x/week with sharp takes on where the industry’s heading, who’s deploying capital, and how we’re reshaping the market from the inside out. 👉 Subscribe here: https://lnkd.in/e6UzcfQG

When it comes to raising capital, founders often focus solely on securing the funds. But choosing the right investor is equally crucial. Last week I spoke a bit about reverse diligence, but here are 5 key questions you should ask during due diligence: 1. What's Your Investment Thesis? Understanding an investor's thesis helps you gauge if your vision aligns with theirs. Are they looking for quick exits or long-term growth? Do they prefer certain sectors or business models? 2. How Do You Support Portfolio Companies? Beyond capital, investors can provide invaluable support. Ask about their network, operational expertise, and resources. Do they offer strategic guidance, talent acquisition, or customer introductions? 3. What's Your Decision-Making Process? This reveals the inner workings of the firm. How long does it typically take? Who are the key decision-makers? Understanding this process can help you navigate the fundraising journey more effectively. 4. Can You Provide References from Founders? Speaking with other founders in their portfolio gives you unfiltered insights. How hands-on is the investor? Do they add value beyond the check? How do they behave during tough times? 5. What's Your Follow-On Investment Strategy? Understanding their approach to future rounds is crucial. Do they reserve capital for follow-on investments? Under what conditions do they participate in later rounds? Remember, due diligence is a two-way street. These questions not only help you make an informed decision but also demonstrate your thoroughness and strategic thinking to potential investors. By asking these questions, you're not just securing capital; you're laying the foundation for a long-term partnership that can significantly impact your startup's trajectory.

𝐈’𝐯𝐞 𝐡𝐚𝐝 𝐜𝐨𝐮𝐧𝐭𝐥𝐞𝐬𝐬 𝐨𝐟𝐟𝐞𝐫𝐬 𝐟𝐫𝐨𝐦 𝐢𝐧𝐯𝐞𝐬𝐭𝐨𝐫𝐬. Here’s why I didn’t accept them all: 1. They didn’t understand my industry. ↳ I need investors with deep niche expertise. 2. Their portfolios weren’t aligned. ↳ I looked for those who have backed similar companies. 3. Our values didn’t match. ↳ I want partners who resonate with my mission. 4. They were focused on quick exits. ↳ I’m in this for the long haul and so should they be. 5. Reputation matters. ↳ I reached out to other founders for insights. 6. They weren’t at the right stage. ↳ I sought investors who specialize in my current phase. 7. AI tools helped me filter. ↳ Platforms like Signal and Crunchbase added to my decisions. 8. Chemistry is key. ↳ I needed to feel confident we could work well together. Not all money is good money. A wrong investor will cost you your company! I only chose investors who could truly propel my startup forward. The right partnership is worth more than just capital. It’s about aligning on vision, values, and growth strategy. In the end, it’s not about how many offers you get, but choosing the ones that truly fit. ♻️ Repost and follow Leon Eisen, PhD - Founder, Investor, Fundraising Coach for daily fundraising, entrepreneurship and VC insights.