One of the most important factors behind the exponential growth of many startups is having the right investor on board. Barring a few, most of the startups require external funding to execute their growth strategy. They look for potential investors who not only fund their business but also share their business network, experience, etc. that are needed for startups to grow; similarly, investors too, look for the next star performer in their portfolio.
So how do they know who is right for them? Perhaps, we can learn something from arranged marriages in the Indian culture to help us build a long-lasting relation between startup and venture capitalist.
When startups and venture capitalists know a little about each other, it resembles the situation in arranged marriages. The way finding a perfect match is a critical decision for people in arranged marriages; for startups and venture capitalists too finding a perfect match is a very tough decision.
Let me show you how the blend and similarities between arranged marriages & startups reveal secrets that bring valuable insights for startups as well as venture capitalists, how a rightly chosen partner adds value to everything we do.
Image source: https://www-techinasiacom.netdna-ssl.com/wp-content/uploads/2013/08/startup-investment-vietnam-topica-easy.png
How these unknown to each other parties use every possible resource to know each other better is a great lesson!
That’s where arranged marriages play an immense role in teaching us how to build this trust. Please note that we are strongly against forced marriages, dowry, castism, and all the other evils of arranged marriages. However unlike popular notion, most arranged marriages nowadays are not forced upon the individuals. Instead, the families identify the potential match for their children so that s/he can formally assess the suitability, workability and mutual compatibility for a long-lasting marriage. In many cases, the prospects themselves take the initiatives to find the right partner using the ever-growing matrimonial sites.
But how can we increase chances of choosing the right partner? It takes a lot of trust to join hands with an unknown party and rely on them for your future decisions. And who to trust?
4 step typical process in an arranged marriage which startups and venture capitalists can think about to follow
1. Filtering – They filter prospects based on basic criteria e.g. education, income, occupation, family structure, hobbies, etc. Families usually do the initial filtering and background check to assure that the match is genuine and someone they can associate with.
2.Introductions – A common person arranges a family meeting for a formal introduction of the families. They decide if the support pillars are mutually compatible and both parties are willing to stand-by in times of need. Prospects express initial expectations from each other and continue only if they are comfortable with it.
Image source: http://worthclark.com/wp-content/uploads/Inspection.jpg
3. Courting – After the introductions, if the potential couple is willing to take things forward, they will be given ample time to understand each other and arrive at mutual decision to take further decisions. This is the time when they understand each other, plan out life together, get to know the dis/likes & comfort/fear levels of each other and everything that matters to them to live a happy and successful life. However, instead of investing endless time, the discussions are to arrive at the final Go/No-Go decision.
4. Formalisation – And when they feel they can sail in the same boat, they exchange the vows with families helping them to start a new life.
Along with a classic process, it’s also the systematic approach to take key decisions with the help of families, which helps marriages to be more successful. Some of the key elements that make them successful are:
They take & share responsibilities for their work and their relationships.
They guide each other to take correct steps in life and move forward together.
#3 Family Affairs:
The relationship is not between two individuals; it involves the families.
Before initiating a relationship they understand & get well acquainted with each other.
Every event/function whether it’s big or small, is organized well.
They are open to question and answer them honestly.
#7 Value for each other:
They care for each others’ reputations and take care of not damaging them.
That is how arranged marriages work, but read the qualities again from the startup’s & venture capitalist’s relationship point-of-view. Let us then introspect and ask ourselves following questions and be honest while answering them.
Image Source: http://ddbaccelerator.com/wp-content/uploads/2015/02/jenis-startup-funding.png
#1 Do we care for mutual understanding on every process and grow together?
#2 Do we trust each other to ask for direction and give directions?
#3 Do we involve all our team members while taking key decisions?
#4 Do we utilize our every available resource to know about our future partner?
#5 Does our convenience cost our partner’s inconvenience?
#6 While dealing with venture capitalists or startups, do we share all necessary information with them?
#7 And the most important question for Startup and Venture Capitalist to answer is that do we build long lasting relationship to achieve a shared objective or only concentrate on funding?
Ideas and businesses wither in isolation; every member who’s invested time, energy or money is equally important. Do we treat them with equal importance and involve them in each process?
Are you walking on the right track to become successful business people? If not, don’t worry; it’s never too late to improve & bring success.
At Innovify we believe in these qualities & offer value driven services. We believe in commitment of the highest order; commitment to quality, trust, transparency, responsibility & development towards our clients and startups .
#Tip: Confidentiality is indeed tempting but transparency builds long lasting happy business relationships.
Stay hooked for more insights on startups, product management and a lot more…Cheers!
Innovify, with its multi-industry experiences with startups & entrepreneurs, guides and mentors them to ideate using a systematic approach. Today, Landbay, AtMayfair, Kwanji and many other startups are driving on the highway to success with Innovify as their product management partner/co-founder.