Giant tech companies appear to wield excessive power such that they easily tend to “crush” small and emerging enterprises in the tech space.
Some countries have taken steps in making regulations to keep off these giant tech companies from taking over these small tech startups.
As rather laudable as this step appears, it may decrease the level of innovation, thereby impairing the tech industry. This can be argued because, when it comes to acquisitions, consent is the major thing required.
Startups that give up their companies for purchase actually have a choice in the matter, but it may also be further argued that large tech companies actually bully these young enterprises.
However, it should also be noted that a good number of these startups actually have it in their mind to get their enterprise acquired by these big tech companies.
Placing restrictions on acquisitions could cause closures for small businesses. Every idea may not be able to stand alone, but with acquisitions, struggling but yet innovative startups can survive.
Barring big tech companies from copying the functionality of an emerging startup’s software application is a much more pertinent issue than chasing after mergers and acquisitions.
A great static to be employed would also be to encourage taking risks and new startups investment via tax incentives, grants, stronger privacy laws and hackathons.
Executing any of these would improve healthy competition in the tech industry.
Also read, Experiencing Funds Scarcity? These 4 ways may help you generate Investors’ interest
If government regulations to break the stronghold of tech companies hold anywhere in the world, investors would be driven away. Startup’s choice in investors can make or mar their potentials.
With fewer options on the part of startups, they may not be able to discern the choice of who to invest in their companies.
Getting investors on board can range from a phenomenal experience to despairing.
In most cases, what brings about disconnect is the unhealthy investor-startup relationship.
The startup and the investor may not share the same vision and values as these two things are essential factors that foster a good relationship.
This article will help you set a path to sharing a common vision and value with your potential investors. Here are three ways to go about the relationship:
Differentiate between influence and incompetence
As a startup, you don’t overlook the influence of an investor in your industry.
When you create partnerships with influential players in your industry, you are setting an open path for similar investors.
This partnership can also provide added values such as new distribution channels, marketing, HR e.t.c
Startups can also get individual investors to come on board through referral. This often comes from people sharing similar values with you, however, you should be wary of a referral coming from someone who hasn’t experience any form of success.
The investor may have the right cash you need, however, you should consider other issues before jumping on it. Money isn’t the only important factor to consider when looking out for the right investor.
What are the motive and future plans?
It isn’t just enough to get excited over getting an investor on board, you must make a further enquiry in knowing why the investor is interested in your business.
Ask them non-financial questions to start with as that will give you a broader scope of their intentions.
You may ask, where they see your company in the next five years, the answers you get may also determine your fit.
Other aspects like getting to know the number of funding rounds and potential number of board members will give you a head shot of what to expect.
Don’t forget that a good relationship with your investor means that you both have a shared vision and value for the future.
Beyond the monetary benefits, your investor is set to obtain, it would be good you get to know his/her long term plans for your venture.
Understand whether your potential investors are inclined with your startup’s long term interest or just to boost their portfolios.
Set realistic goals
In maintaining a healthy relationship with your investors, you will need to learn how to slow down on expectations.
Give your potential investors the benefit of long-term with you while trying to deemphasize revenues on the short-term.
Don’t overpromise so as not to underdeliver, because factors such as market regulations and conditions often affect your set revenue target. So when you commit yourself by overpromising, the bulk of the blame falls back to your table.
Commitments that are realistic include adding new product features, signing up new vendors, increasing the active number of users. These are practical, significant, and quantifiable goals to work with.
Conclusion
When it comes to investors matters, the most significant factor to bear is the shared value and vision.
Both of you would be setting a quick path to failure if you focus on the short-term revenue goals.
No matter what your end goal is, both of you must be aligned to attain your potential.
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