Recently, I had a conversation with an entrepreneur about whether or not to raise early stage capital for his business. What I found interesting was that he was only considering an outside investor as a source of money. In his methodical pros/cons approach, the only upsides he listed to taking money (as opposed to bootstrapping) were related to dollars and economics.
I worked to make the point that he should seek out an investor the same way he seeks out business partners. The right investor can change your trajectory in so many ways beyond your balance sheet and payroll.
This was my silly way to make the point:
Assume you have a startup in the social media space. What if you took a $1.00 investment from one of these guys: Jack Dorsey, Dick Costolo, or Mark Zuckerberg. You put him on your Board. You put out a press release. You have him thinking about your company and making, say 1 a minimum relevant introduction per month for your company. You have quarterly Board meetings where he and others sit in a room and talk about nothing but how to make your company better.
Consider what kind of introductions would he be making. Consider what that level of PR would do for your business. Consider if you had a problem with XYZ, how much easier, faster it would be to solve it with one of these guys on your team, working for your company. Consider the people they meet with on a daily basis and what it would cost you to have a rep get those same contacts and have a relationship with that network.
This is what I mean when I say that startups should recognize the value of “Venture Energy” beyond “Venture Capital.” The right investor brings an efficiency of the output-to-forward-motion ratio that can make a huge difference. Just be sure this goes into the equation when deciding to raise money and selecting the right investor.