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16 Dezember 2020

What to look for in an investor: 4 key takeaways

Venture capital funds, angel investors, private equity companies, due diligence, cap table and all these terms are making your head spin? That’s alright, rest assured you are not the only one.

Your main focus is to keep your business running: acquire customers, keep them happy, manage a team and all the other resources, but at some point you realize some help would be welcome. Not sure in what shape or form, but help is needed. Funding and resources are always welcome, but is that enough?

In this article we spoke to a few founders and CEOs from the Russmedia Equity Partners portfolio who managed to find that help, without having to compromise or without having to leave the business, they worked so hard for.

1. Experience

The experience of an investor is certainly something that you should be looking into. Who is the team behind, what projects have been working on, basically make sure you do your homework and find out what their track record is.

Robert Rutkowski is the Managing Director of Erento , an online rental company based in Berlin, that recently acquired Campanda , Europe’s largest RV rental marketplace. In his opinion the investor you are choosing should be highly experienced in many areas, not only in the field they are looking to invest in, and finance related matters, but also mergers and acquisitions, successful negotiations and of course a large pool of contacts.

What helped us in this process is that we have experts in the house, Russmedia Equity Partners helped a lot both with their M&A expertise, but also from the operations side.  We consulted with them during the entire process and without this support and their experience it wouldn’t have happened so fast. And speed really mattered in this case, because otherwise we would have probably lost the opportunity. It would have been much more difficult to do this without our investors.

Robert Rutkowski, Managing Director Erento

2. Resources

The amount of the funding is not the only thing one should be looking for. When you are looking to find an investor take into consideration what resources does this new partner have to offer to you and your team? Consulting, infrastructure and a large network of experts and / or potential clients sometimes weigh in more than some extra money in the bank, especially for the long run.

Russmedia Equity Partners recently invested into Bergfex , Europe’s largest tourism platform in the Alps.

We are happy to have a strong partner with Russmedia, a family business with a 100-year history, who shares our vision of sustainable entrepreneurship. In the Russmedia network, Bergfex can accelerate its growth as an independent, founder-led company and continue to develop new services for mountain enthusiasts.

Markus Kümmel, Co-founder Bergfex

 says Markus Kümmel co-founder of the app with more than 4 million downloads and trusted by more than 65 million website users.

With this investment, the Bergfex team got access to technical support and shared services, extensive knowledge exchange and more recently the cooperation with Austria’s leading premium online marketer, austria.com/plus .

“With its premium portfolio and many years of specialization in regionally relevant portals, the Vienna marketing team from austria.com/plus is the right partner”, concludes Markus .

3. Partnership

If staying on board as a founder when looking for an investment is your target, then you should be extra careful who you take money from and what are the terms and conditions of this engagement. 

Martin Lenz , CEO at Jobiqo , a Vienna-based job board solutions service provider believes that an investor should be a partner, not just someone that comes in, puts money on the table and then turns everything upside down. The experience he had with his team last year when they signed with their investor was very pleasant and he believes that the entire process should become a cooperation more than a negotiation.

I would recommend if you seek out investment, first of all, talk to other portfolio companies. I think this is really powerful to get an understanding how, especially, critical situations are handled. Everybody can discuss how did your partner handle the current situation? Did they just force you to let everybody go? Or did they work together with you to continue the plans that you have in a rational matter and also to discuss the flexibility that you have?

Martin Lenz, CEO Jobiqo

4. Compassion

Peter Weiler , co-founder and managing director at Dating Central Europe , a Budapest based company operating dating sites believes that personal relationships and empathy are crucial to the success of any partnership. 

Peter and his company had multiple investors over the years. From close friends whom he founded the company with to large international media groups. He learned in the past two decades that money and spreadsheets are not everything.

 

When you are looking for an investor, you are looking for a partner with compassion and understanding. Empathy also means that they know what you're going through when good times come, when bad times come. You need a partner who understands and supports you with ideas and direction if necessary. I think that's the key. There are so many investors out there, who are not compassionate, who don't care, who only care about the excel sheets, but don't care how you will do it. It's a binary thing. You have it, or you don't have it, and I think with compassion, you're getting a colourful and positive understanding.

Peter Weiler, Co-founder DACE

Finding the right partner is one of the hardest things, but with research, open conversations about expectations from both sides plus very solid strategies, seasoned with a lot of patience, good things will happen.

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