Above: A visitor views the electronic sculpture ‘$’ by Tim Noble and Sue Webster at Sotheby’s auction house in London June 8, 2015.
Entrepreneurs know it can be difficult selecting the right investors to fund their startup. But instead of choosing firms based on which has a celebrity partner or offers the most money, Norwest Venture Partners‘ Sergio Monsalve counsels startups to select venture capitalists who will be there for the long term.
In fact, he offers several points a company must consider before taking money from an investor: Are they proficient in your space? Has the firm demonstrated that they are dependable in good times and bad? Are they aligned with your vision?
Norwest Venture Partners (NVP) may not be as well-recognized as the likes of Andreessen Horowitz, Kleiner Perkins Caufield & Byers, Greylock Partners, and Google Ventures, but for over 50 years, the firm has been positioning itself as more than just an investment provider. “Early on we realized that we needed to be catering to the needs of entrepreneurs and had to look at [them] before [the need] arises,” Monsalve told VentureBeat in an interview.
He further explained what it means to be service-oriented: “Being a multi-stage firm with a large fund, [entrepreneurs] get the best of both worlds (capital and resources). You work tightly with a few partners that can help you throughout your company’s life cycle. How do you start a company from scratch, establishing product fit, scaling, IPO, creating a reputable company model?”
All venture capitalists aren’t created equal
When a startup decides to accept funds, Monsalve believes it’s important to consider what else investors are bringing to the table. NVP, for example, touts its entrepreneurial roots (many of its partners were founders themselves) and a database of knowledge around different market conditions, trends, and other insights gleaned over the past 53 years.
He cautioned that many venture capitalists are unwilling to extend themselves beyond the initial outlay of money. “A lot of people that are investing today just want to write a check and pray,” Monsalve said. “That’s not a strategy that works — that’s called betting. [NVP] wants to invest and partner with startups and work with them.” He added that NVP sees its role as essentially entrepreneurial, in that the company has “skin in the game” and is willing to do what it takes to help the business succeed.
Monsalve explained that entrepreneurs need partners who aren’t afraid to dive into the trenches when things go bad. For NVP, that includes more than what they put in financially; its partners are willing to put in the work to help out in whatever way it can: “You can call someone at 5 a.m. or ask for help on the weekends — this doesn’t happen if you just pick someone off the street and give them a few shares.”
Above: Wallpaper along a building in London, England near the Grand Union Canal.
