Get All Access for $5/mo

Startup Ecosystem: The New Age Doctrine for Investor-Investee Relationships There are some amazing examples world over on how investors have enabled founders scale, innovate and change the entire landscape of markets

By Yuki Kawamura

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

shutterstock

The Indian startup ecosystem is bustling with innovation, with homegrown startups scaling like never before. Investors have played a key role here, providing the necessary financial as well as strategic assistance to entrepreneurs to take their businesses to the next level. Today's investor- investee relationships seek to go beyond term sheet, bringing in elements of learning, growth, cross-collaboration and a shared vision to disrupt markets. This plays a key role in the way the startup unfolds. There are some amazing examples worlds over on how investors have enabled founders scale, innovate and change the entire landscape of markets.

Here's a brief overview of how an early-stage startup and investor manage and leverage their relationship:

  1. Common goals and shared vision While it may take time to align across different parameters, having common goals and a shared vision is crucial. This impacts the overall growth of the company, both investors & founders need to work together towards one direction for maximum scalable results. Parity in vision often results in fragmented results despite both investors and founders putting in effort. For example, If the company is very interested in setting up a private line when the investor is interested in a marketplace, there can be arguments about where to allocate resources etc. To enable a smooth journey for both parties, it is imperative to make sure your future plans for the company are aligned.

2. Network and grow together

The biggest mutual benefit in an investor-investee relationship is knowledge sharing and network. However, the onus is more on investors, since they have a large network of peers who could be critical for subsequent rounds of funding. Their network could also help in connecting the business with other companies, vendors, trainers, and many other stakeholders who could play a key role in business growth in the long haul. They could invite their portfolio companies to investors' meetups, enroll them for webinars or learning sessions, or invite them for a casual round of conversation with a potential partner. All of this counts when the business owners are keen to learn and experiment.

3. Be Transparent: No amount of emphasis on transparency is ever enough. Both parties need to meet frequently to discuss business plans, progress, and projections. If you are not transparent about your needs and requirements, you won't get the help you need. Communicating transparently and frequently ensures alignment in goals.

4. Trust is non-negotiable: Startups often operate in a highly dynamic space where the landscape and the way the company operates shifts quite often. Trust is an important factor that helps both the investor & the startup navigate through the many shifts. Candid discussions about future plans, the current state of things and the speed of execution are the key to zoom past such times. The experience of an investor could help here to anticipate problems and the business machinery can get onto the task in time.

5. Do not over commit: It's important to set realistic and mutual expectations from day 1. While every founder is striving for excellence, it's important to be committed to practical results as well. Committing to results without in-depth knowledge or lack of viable data can often result in unrealistic goals. It's key to have a solid if possible data-driven approach to committing and successfully achieving goals.

By Mr. Yuki Kawamura, Partner, AET Fund Japan & Ms. Sanna Vohra, CEO & Founder, The Wedding Brigade

Yuki Kawamura

Partner, AET Fund

Starting a Business

I Left the Corporate World to Start a Chicken Coop Business — Here Are 3 Valuable Lessons I Learned Along the Way

Board meetings were traded for barnyards as a thriving new venture hatched.

Lifestyle

Actress Nupur Sanon breaks boundaries between fashion and business with her new brand, No Boundaries

As Bollywood actress Nupur Sanon starts her new clothing brand NoBo—No Boundaries recently, in conversation with Entrepreneur India, the young artist opens up on her childhood story that inspired her to start her journey as an entrepreneur, why fashion policing on women should stop, and how she is balancing between establishing a homegrown brand and working on her next film Noorani Chehra with Nawazuddin Siddiqui.

Growth Strategies

EV Industry Voice Its Wishlist Ahead Of Budget 2024

GST, reallocation of subsidies including FAME and PLI, and boost for recycling and R&D among concerns of electric vehicle sector ahead budget session mid-July.

Business News

Apple Reportedly Isn't Paying OpenAI to Use ChatGPT in iPhones

The next big iPhone update brings ChatGPT directly to Apple devices.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Branding

ChatGPT is Becoming More Human-Like. Here's How The Tool is Getting Smarter at Replicating Your Voice, Brand and Personality.

AI can be instrumental in building your brand and boosting awareness, but the right approach is critical. A custom GPT delivers tailored collateral based on your ethos, personality and unique positioning factors.