Glossary - Value-Added Investor
A value-added investor is an individual or entity that contributes more than just capital to a company, typically offering a combination of sector expertise, networks, mentorship, and strategic guidance. These investors work closely with the company's management to accelerate growth, improve operational efficiency, and increase the company's value.
Also known as
- Strategic Investor
- Smart Money
Use cases examples
- Term Sheet: The term sheet outlines the expectations of the value-added investor to provide strategic introductions and operational guidance beyond the financial investment.
- Investor Update: In the quarterly investor update, the CEO highlighted the contributions of value-added investors in opening new market opportunities and refining the product development strategy.
Considerations for investors
- Conduct thorough due diligence to ensure understanding of the company's needs and how the investor's unique value proposition can best address those needs.
- Commit to active engagement and support of the company, acknowledging that providing tangible value beyond capital may require significant time and resource investment.
Considerations for founders
- Ensure alignment of vision between the founder and the value-added investor to promote a fruitful partnership.
- Understand the specific value-adds the investor brings to the table and how they will impact the company's trajectory and operational dynamics.
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