How to find an investor that matches your business values

In the past few years, I have seen businesses partner with investors that do not align well with the companies’ values and the consequences can be devastating to long-term growth and profitability and overall performance of the companies.

Finding an investor who aligns with your business values is a critical step in building a successful partnership that can only benefit your business in the long run, but for many businesses, too often there’s a temptation to take investor money without thinking about whether the investor is someone who shares your vision, or you want to work with long-term

Here are five steps to first consider before partnering with an investor:

Step 1 - Outline your business values

Start by clearly defining your company's values. What is your mission and vision? What are your core beliefs and principles? Write them down and make sure they are clear and concise, the more detail the better. The key aspect is to define boundaries and what you would do or not do. For example, if you are a consulting business, will you share findings from an assignment with a competitor of a client?

Step 2 - Research

Look for investors who share your values by researching their investment philosophy, portfolio companies, and previous investments. You can also use online resources such as Crunchbase, AngelList, or LinkedIn to search for investors, there are many resources online for you to do your due diligence in the first instance. Once an investor is interested in investing, there is a bit of a reverse process, where they lay out all the value they can add to your business. This is an important moment to investigate the softer side of investing, and see if trust can be established. The investors you will invite in your business will make decisions with you over capex, acquisitions, and potentially taking other investors or even selling the business. You want to create a partnership with this investor.

Step 3- Network

Online resources are great but there is also tremendous value in attending networking events and conferences related to your industry or niche to meet potential investors. This enables you to make important connections, ask questions, and get a better sense of who shares your values.

Step 4 - Word of Mouth

Word of mouth referrals are a great tool to scope if an investor is right for you. Ask entrepreneurs, advisors or mentors for referrals of investors who may align with your company values. This can be a great way to find investors who are a good fit and has the added bonus of a referral from someone you already trust

Step 5 -Interview potential matches

When you have identified potential investors, a good way forward is to set up interviews to truly learn more about their investment philosophy, values, and goals. This will help you to determine if they are a good fit for your business and gives you the chance to get to know them.

So you’ve taken the first step, done your due diligence, but the question is why is it so important to partner with an investor that shares the same values as your business?

Reasons why alignment in values with an investor will benefit your business

Goals alignment

When an investor shares your company's values, they are inclined to understand and support your company's goals. This can lead to a more harmonious working relationship because both parties are pursuing the same goals.

Cultural compatibility

Investors who share your values are more likely to fit in with your company culture. A good cultural fit can lead to improved communication and collaboration between the investor and the company, which is critical for long-term success.

Growth that is sustainable

When it comes to achieving sustainable growth, an investor who shares your company's values is more likely to be patient and understanding. This means they are more inclined to support long-term objectives rather than short-term gains, which can lead to more sustainable and stable growth for your company.

Brand image and reputation

Partnering with investors who share your values can help to strengthen your reputation and brand image which is vital for successful business growth. It can convey to customers and other stakeholders that your company is dedicated to certain principles and values, which is very important in today's socially conscious environment.

As a founder, you are responsible for your company's values. Although you may not own all of the company's shares, the ethics and standards that guide your business will always be yours to manage. Because of this, you need to protect what you've created, so do everything you can to maintain your control. Overall, finding an investor who shares your values can help your scale-up business achieve long-term success while maintaining its principles and values. A win-win for everyone. It is important for your Board, your employees, and your partners to get this right.

About Rafael S. Lajeunesse

Rafael is CEO of ReachX and responsible for driving the company's vision to be the trusted platform for institutional investors and corporates, offering bespoke Investment banking services and access to investment opportunities and capital. Prior to ReachX, Rafael worked with JPMorgan & Co. in London where he was a Portfolio Manager. He was also a consultant with McKinsey & Co. in New York working with clients across media and financial services. He earned an MSc. from the EMLyon Business school and received his MBA from The Wharton School.

Alister Sneddon, Head of Product, CMC Invest.