Smart Money: Investor Entry Beyond Capital

Contributions from venture capital funds and crowdfunding can add value to the company’s brand, attracting experienced mentors to develop the business proposition and creating alliances to create new solutions. For many entrepreneurs and startup founders, the secret to developing new products, acquiring technology, strengthening teams, having qualified employees, attracting more customers, and expanding the business in a short period of time is related to bringing in millions of dollars in project contributions. . Venture capital funds and crowdfunding.

This understanding is not entirely wrong. After all, with money in the drawer, it’s easier to launch projects, test possibilities, and prepare the company to gain traction on another level, from thousands of customers to millions of customers. But there is another aspect that can be as beneficial or more beneficial than what pumping resources can achieve. Also, too much money in the treasury creates temptations to make mistakes.

Smart money or smart money, in English translation, has the potential to be a business differential. Raising resources with investors who can help solve a specific problem for a technology company is essential to getting new products and services off the ground. It is very common for investors in venture capital funds and crowdfunding to have extensive experience and knowledge of the market in which the investment company operates. Often the investor won’t be around for the grind, but her experience in the business is important to solving problems faster and acquiring more customers faster.

Likewise, when a popular crowdfunding fund or platform decides to bet its chips on a startup, there is a kind of “stamp” of the thesis put forward by the entrepreneurs. Gradually, the company has been able to develop a strategy to become an authority on the subject of the sector to which it belongs. Thus, attracting more capital and liabilities become less difficult.

Also, when we think about networking, legacy investors may bring with them not only a complete unified business network, but also an assessment of companies that might be a good fit for the invested startup program.

On crowdfunding platforms like SMU Investimentos, it is common for several angel investors to come together to invest in companies that are innovative enough to solve a problem and attract a large number of consumers. It is a way of reducing the risk-reward ratio: with smaller investments, it is possible to bet on several companies. In this case, the smart money is inflated, it comes from the executives of the platform and also from the main investors.

Finally, when it comes to smart money, entrepreneurs need to take some precautions before making a decision. To avoid the so-called “false smart money”, it is worth noting the investment history of the vehicles, the occupations of the managers and the thesis of contribution to crowdfunding funds and platforms. If these aspects are positive and in line with the company’s planning, it is worth considering the real possibility of entering new partners.

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