Investors talk all the time about the value they add beyond money. There are many ways they can do this, whether it’s helping you fill that engineering position or making a introduction that leads to a big business development deal.
Growth is one of the most common startup problems, which is why your investment round should include investors who can help you with growth.
A big part of an investors job is to take a higher view of the market, industry, etc. than most founders and look for trends. An investor also talks to hundreds of startups a year and, through these talks, they can more easily find patterns among the companies they meet.
The knowledge they gain from these activities allows them to see things you can’t, which is hugely valuable.
How can an investor specifically help with growth?
High level view of marketing landscape
Investors talk to hundreds of startups as well as other investors. They also are in contact with later stage companies that, depending on how much farther they are from your situation, can provide a window into the future of your growth.
They start to build up a sense of what channels are working and what aren’t. They can also provide examples from previous companies about what those companies started with and found success with to help guide you in your choices.
Analytics and metrics
Analytics and metrics are one of the top problem areas I see with the startups I talk to. Many set up Google Analytics and stop there. Others try to track way too many metrics and have a very hard time focusing on the biggest issues with their app’s growth.
Many investors have a financial background and all investors need to be analytical about their work, so they can be a great source for metrics and analytics advice. They can help you find and focus on meaningful metrics as well as learn new, more informative ones.
Know benchmarks for similar businesses
Knowing how your startup’s conversion rates and other metrics compare to other companies is immensely powerful.
- It can help you prioritize. If you reach the upper range on your conversion rate, you’ll know to move onto another growth lever.
- It can greatly reduce your stress knowing that your numbers aren’t as terrible as they seem.
- It can really improve your spirits knowing that your numbers are actually a lot better than others.
- It can also bring someone back to reality if you think your numbers are phenomenal when they aren’t.
Knowing conversion ranges, traffic ranges, etc. is huge for a startup. Say your goal is 1000 customers. You have a 1% conversion rate for the site – how does this compare to other startups? How much traffic can you expert to convert?
These are all questions an investor with growth knowledge can help answer.
If you’re looking for investment, make sure that you’re optimizing for growth value add with at least one investor.
If you already have investment, look at the list and see where your investors can help you.