If You Want to Grow Your Startup and Value, Nurture These 3 Stakeholder Relationships These are the relationships startup founders should prioritize to enhance their growth, brand value and overall valuation.
By Lirone Glikman Edited by Kara McIntyre
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A startup's brand — both the company and the founders' brands — plays an important role in shaping how investors perceive their business and, ultimately, how much they are willing to invest. Building a strong brand for the startup and founder, can help differentiate a company, emphasize its unique benefits and increase its perceived value, leading to a higher valuation in the eyes of investors
A company's brand is composed of various persistent actions done online and offline. One component that affects a startup's brand lies in their relationships. Let's shed light on this component and present the three types of relationships any startup founder should focus on to increase their growth, brand value and, ultimately, their valuation.
Related: From Customers to Investors to Employees, Here's How to Connect With Every Company Stakeholder
1. Board members and advisers
Having board members or advisers who are industry experts can provide significant value to a startup's brand and valuation. Those with the right industry knowledge, connections and reputation can help a startup navigate the competitive landscape, identify new opportunities and open doors to potential customers and investors. In fact, a KPMG study called the "2019 Global CEO Outlook" found that board reputation is the second most important factor considered by investors when evaluating a company. While this may not come as a surprise to many, the truth is that finding and harnessing the right board members or mentors is not easy, as they are usually sought-after people.
To establish relationships with industry experts for potential board members, it is important to first plan out the ideal composition of expertise, knowledge, connections and reputation that your board needs. For example, one board member could be highly connected within your industry, while another may have a Ph.D. in your area, and another may have advised the President of the United States. Additionally, you may want to define diversity goals for your board, such as having an equal number of women and men. Once you have established the necessary structure and profiles, start brainstorming potential candidates for your board.
The best way to reach out to such individuals is through warm recommendations and referrals from existing board members, investors, or other industry contacts. Startup founders can also attend industry events, participate in online forums and groups and join industry associations where the right profiles of board members may be present.
One of my career hacks when it comes to finding board members is to approach the "formers" in your industry, such as "former founder of a Fortune 500 company," "former dean of Harvard Business School" and so on. These former seniors often have a wealth of knowledge, connections, and reputation, and are looking for their next exciting endeavor, and to be a part of the new generation's work. If you approach them with passion and resonate with their values, they could be your best-kept secret to help drive your company toward its goals!
Related: Make Sure Your Business Aligns With Your Stakeholders' Worldview...And Your Own
2. Industry investors, founders and leaders
Establishing a robust network of industry investors, founders and leaders can significantly benefit a startup's growth and brand and valuation. Such connections can provide access to capital, mentorship and strategic advice, which can prove invaluable. It is essential to build relationships based on trust, mutual interests and authentic friendships. When founders are well-connected and valued in their industry, within their network they can support and recommend one another, which ultimately strengthens their personal brand. Additionally, a national research study by Brand Builders Group reveals that 82% of all Americans agree that companies are more influential if their executives have a personal brand that they know and follow.
To build relationships with industry investors, founders and leaders, startup founders must be visible both online and offline, even if they prefer to be in the office managing the company. They can attend networking events, participate in accelerator programs, and join relevant online communities. By connecting with industry leaders on social media, and posting engaging content, initiating meetups with other industry leaders or having one-on-one meetings, they can gradually build authentic relationships. The key is to be proactive, authentic and intentional in building these relationships.
3. Co-founders and team
Investors focus on the relationship between co-founders specifically, and the company culture when evaluating a startup's potential. The ability of the startup's leadership to work together and foster a positive culture is crucial to executing on plans, navigating challenges and driving the company forward. In turn, it impacts the startups' brand and valuation. Additionally, a distinct workplace culture is believed to be important for business success by 94% of executives and 88% of employees, according to a study on partnerships and relationships in the workplace by Deloitte. Ultimately, investors want to see that the startup's leadership and team have the ability to work together and create a culture that supports innovation, growth and success.
To establish good relationships among co-founders, it is recommended to foster open communication and collaboration to build a positive and productive work environment. Startup founders can create a strong company culture by defining their values and mission and promoting an open culture that supports individual growth, offering employee benefits, and encouraging work-life balance. They can also organize team-building events and activities to promote team cohesion and foster a positive work environment, among many other ways.
Related: 3 Social-Intelligence Methods for Building Strong Stakeholder Relationships
In conclusion, forming the right relationships with industry experts, investors, founders and leaders, as well as prioritizing the management team and company culture, can significantly impact a startup's growth, success, brand and valuation. It is advised for startup founders to focus on building a strong personal brand by following the above actionable tips and building strong relationships, among other brand-building components. This can increase their success factors and perceived value and, ultimately, support attracting the funding they need to grow their startup.
