History shows that founders who have built successful companies before are more likely to do it again than someone who is fresh out of college brimming with ideas to change the world. This isn’t to say that the latter wouldn’t succeed but is a testament to what experience can do and why it’s so valued in our world.
In the last couple of decades, startups in India have truly taken off with more and more going public and creating massive wealth for all stakeholders, and what that has done is create an entirely new class of investors who understand the game better than most.
The operator investors.
These are people who may not necessarily have founded companies themselves but have been there early at some of the household names you hear of today, and have amassed wealth, both in experience and money, through the course of their journey.
Some of them understand product better, some of them may give you better financial expertise, but all of them have one thing in common: the ability to help founders like they deserve to, as partners and peers.
Here’s why raising from and having operator investors on your cap table may be the best thing to happen to you:
They bring insights with empathy
Someone who has seen the highs and lows of building a startup will inherently understand your journey better than somebody who is only thinking about potential returns.
Starting up is hard and on this journey, you want people who will empathize with your problems, and pat you on the back when things are not going so well.
They will have deep insights into startups are actually built, having been down in the trenches themselves and if you are an early founder, you will find some of these invaluable. Be it how to put together the right team or how to navigate through an impending recession.
Additionally, unlike traditional investment firms where you only get to spend time with them periodically, operator investors are more likely to get their hands dirty and have a stronger attachment to their portfolio companies and skin in the game >>>>> everything.
Doors break open through their network
They have been around for a while!
It quite simply means that they will open doors for you that may otherwise be closed and this could well be the difference between shipping today versus next week.
For the sake of an example, imagine if you need help with integrating a payment gateway to your product and want specific features to be included. As a startup with no business coming in, why’d anyone do that for you?
That’s right. Having an operator investor who has connections at a payment gateway company is how you get there.
Raising from individual operators is easier than ever
The most difficult part about having so many operators onboard is the process and the compliance proceedings that follow.
With a Special Purpose Vehicle (SPV), founders can now easily go from collecting investor interest to having money in the bank in a matter of days. Forget drowning in paperwork, focus on raising and building!
In fact, one benefit of SPVs is that all the investors won’t show up individually on the cap table, but rather as a single entity.
At Infinyte, we now have a platform that can help. Drop us a note and we’d be happy to take it from there.