Questions

What's your experience with investment from a private business rather than a VC firm?

Deals with VC firms are usually clear and understandable in terms of roles and expectations of the investors and founders. But what are your thoughts on a medium size private business investing in an early stage startup in a similar area to expand their activities and potential revenue?

2answers

I have worked on a lot of transactions that look like this..

The motivation of a larger entity should be to acquire undervalued/growing companies, assets, or projects that have largely 'de-risked' the trial and error phase of creating a new product or service.

Ultimately, in an investment partnership such as this, the investing company will likely want to acquire the whole target company/product/service/assets at some future date, so I would suggest that the offer, if there is one on the table for you, consists of acquiring a controlling shareholder stake in your company, am I right? Or is this simply a figurative question?

In dealing with private companies, the sure questions I would be asking right away are: Who are they? What is their track record/reputation? And what are the terms of their offer if any?

The devil is in the details of transactions such as these, so would be happy to take a closer look or discuss further if you would like to connect with me.

Until then, good luck.

Regards,

Chad


Answered 9 years ago

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