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3 Ways VCs Can Add Value to Your Startup Beyond the Cash

For entrepreneurs who didn’t choose a VC for their startups, they always put it this way, “the only value VCs add to a company is money”, and this was confirmed by Sam Hogg in his recent post in Entrepreneur as well. However, he points out that “in fact, the profile of a typical VC is starting to mirror that of a successful entrepreneur, and the next generation of VCs will likely have resumes that are heavy on entrepreneurial operating experience.” In addition, he presents three ways VCs could add value to the startup besides the money.

Experience on boards.

Experience on boards.

VC partners sit on boards–lots of them. If you wonder what a successful VC’s calendar looks like, take each investment and multiply by four for quarterly meetings. Triple that for two travel days on each end, and pretty quickly you get to 200 days a year out of the office.

Help with fundraising.

Help with fundraising.

When it comes time to raise funds for your next round, your VC can be your best advocate. In fact, chances are that your investors have been profiling other VC firms to form an investment syndicate all along. Don’t hesitate to lean on your investors for introductions to those other firms.

Help with recruiting.

Help with recruiting.

VCs maintain giant contact databases of senior talent, and it’s common for large firms to keep bullpens of specific executives: a starter to launch a business, a setup person to get it in top shape for a sale and a closer who can guide a company through the sale. As a business owner, this saves you the hassle of trying to find talent who can take your startup to maturity or set it up for the sale of your dreams.

And the power of VCs does not limit to these three ways. Nowadays, VCs come from various sectors, and could provide much more help than only the cash.

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