Cash Isn't (the Only) King: 5 Types of Non-Financial Support Entrepreneurs Need
Money is not the only thing valuable to founders to help them grow.
Every entrepreneur wants to grow her or his startup. Cash is key, but it's wrong to think money is the only thing valuable to founders. Increasingly, I see entrepreneurs who want much more than financial support to help them grow. They want support from people who have been there and done it. People who can offer them time, belief, enthusiasm, expertise and a network to help them rise to the top.
A business never stands still, it either moves forwards or backwards. All of us want to move our startup onwards. We want to grow it, make it incredibly successful, then exit it. And do it again! Of course, money is incredibly important to the growth process. Whether it's sweat equity, bootstrapping, raising capital or financing an acquisition, being an entrepreneur sometimes feels like a non-stop dash for cash. Entrepreneur Mark Cuban says that, "raising money is not an accomplishment, it's an obligation." True, but investment isn't the only thing that's valuable to founders.
Hayley Cowburn is an inspiring young founder of a disruptive startup that I recently invested in. She summed up the difference between a financial lifeline and a deeper sort of support. "We'd spoken to a lot of companies about investment before but we always came up against the same problem, that we just didn't like any of the people that we spoke to," Hayley said. "Typically they would treat the conversation as if we should be grateful to even be speaking to them, and wanted terms that put all of the power in their hands."
I'm a serial entrepreneur myself, and talk regularly with the 30-plus founders I support at companies I've invested in. I've identified five other forms of support that are just as important to people striving to make their business a success. Here's my list, and some of these might surprise you.
1. Someone to build their confidence
Becoming an entrepreneur is a process of constant, personal transformation. You access new skills, new understanding, new knowledge, new depth, new wisdom. The journey can feel like a series of leaps of faith. Whether it's your first hire, premises, investor meeting, acquisition or exit, it can feel overwhelming. To make the jump, you sometimes need a push, in the form of someone to say, you can make it.
Founders I work with really value having someone like me, who has been there and done that, to reassure them that they can do it. Without confidence to transform and grow, no amount of cash can help.
2. Somewhere to ask all the stupid questions
First-time founders might worry about their lack of education, experience or knowledge of the sector they have chosen to disrupt. They are armed with a brilliant idea, a burning urge to make it successful and an insatiable desire to learn how to make it work.
This mixture of inexperience and/or lack of expertise, pushing boundaries and outsized curiosity can actually be a blessing — as it was for me — but it can also be a curse. It can make you feel exposed in front of seasoned, degree-educated investors who have supposedly seen it all. And that means you can be afraid of asking questions. The ones that you feel are important but might appear dumb to more experienced business people.
That's why I believe founders should seek out investors who can also be a bit of a mentor. Steve Jobs said, "half of what separates successful entrepreneurs from unsuccessful ones is pure perseverance." Likewise, I'm not investing in a founder for their ability to create a board presentation, read a balance sheet or know the formula for rocket fuel. I'm supporting their vision, energy and skill for getting people on board. They are attempting something new for which there is no existing map route for success.
Feeling able to ask important questions without worrying about them being dismissed as stupid is important to entrepreneurs. They want to learn how to be successful from more experienced people. So they rightly gravitate towards investors and mentors who won't judge curiosity and eagerness to learn harshly.
3. A team that shares the same excitement for the business
Product love is one of the best indicators of whether a startup will succeed. If customers are genuinely passionate about the product, more customers, sales and investment will surely follow.
Entrepreneur Jo Malone said, "passion, creativity and resilience are the most crucial skills in business. If you've got those, you're ready to embark on the journey." Otherworldly enthusiasm is crucial for any founder, but they want the same from their team and their investor team as well.
When it comes to growing their business, founders want more than a financial transaction. Sure, if they can only get cash from investors then so be it. But deep down, they all want a growth partner who is as excited about their business as they are. Some investors will not only be enthusiastic, they will be more expansive with it than the founder. They'll say, brilliant idea and we can make it even bigger! With many businesses I invest in, founders are thinking tactically and short-term about their next big growth leap. Investors on the other hand, are thinking more strategically and long-term.
For instance, where the founder is looking to reach a new local market sales milestone, the investor is eyeing up global scaling and acquisition targets. In turn this amplifies the excitement for the business and its future, creating an energizing optimism that founders love.
4. Connections with brilliant employees
The right hire can be life changing, as my first CFO was for me. Before offering him a job in my highly ambitious startup, we met up so that I could boldly pitch my company to him. He had a great reputation as CEO for a major international corporation. I remember him telling me stories of doing massive, global deals that I hadn't imagined were possible up to that point. It just leveled up my thinking and opened my eyes to huge possibilities. What a great, game-changing hire.
From my four companies (two of which I already sold), I'm lucky to have access to a big network of talented people in a variety of fields. From fashion designers to particle physicists and digital marketers to debt financiers. And while I don't think I'm putting the world's biggest recruiters out of work just yet, the entrepreneurs I support like to be connected with that talent network.
5. Introductions to industry leaders
Recently I was in a large bank's headquarters in London's financial district. It was a huge, modern skyscraper. I went into the elevator, and my host entered a secret code to take us to a private space with highly limited access. We were off to a special floor reserved for VIP guests, but it seemed like we were lifting off into the clouds. I felt extremely charmed by the access to this luxury space, where I met with industry leaders that could transform my latest business. It seemed a long way from Blackpool, the working-class northern England town where I grew up.
Currently I'm working with a young founder from Blackpool, called William. He's just starting his entrepreneurial journey to transform education. His idea is truly bold, but deeply difficult. Introductions to a network of leaders, like those I met in the clouds, can make it easier. Getting access to and support from people who have been there and done it helps. In this case, it's meeting people who themselves invented the future. They did so by disrupting a sector with a new idea, for which there was no roadmap, and sharing their playbook for success.
For founders, capital is important for growth, but it's not the only support they need. Softer aid like giving entrepreneurs confidence, mirroring their enthusiasm and helping to expand their growth horizon are equally if not more important in the early stages. Additionally, connecting meaningfully to industry leaders allows founders to access knowledge, insight and ideas to bring their vision to life. And connecting them to top talent enables them to keep it on track. So when it comes to finding backers, founders would do well to seek out those things as well.
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