The Added Value of Investors  

by Giuseppe Natale, Former CEO, Co-Founder and Board Member, Valagro (Syngenta Biologicals)  

Money is more than just money when it comes to bringing an investor into your company’s capital. This process involves a series of strategic, operational, and relational considerations that go far beyond the financial aspect.  

Here are some of the main reasons why an investor’s money is much more than just money:  

Strategic and Operational Support  

Investors bring a wealth of knowledge and expertise that can be extremely valuable for the company’s growth. They can offer strategic advice, help in defining long-term goals, and contribute to improving business operations.  

Access to Resources and Networks  

A well-connected investor can open doors to new markets, strategic partnerships, and high-profile clients. Their network of contacts can significantly accelerate business development.  

Validation of the Business Model  

An investor’s entry also represents an external validation of the business model and strategy. This can enhance the company’s credibility in the eyes of other potential investors, customers, and partners.  

Alignment of Objectives  

When accepting an investment, the investor’s objectives must be aligned with the company’s objectives including aspects like long-term vision, risk tolerance, and return expectations. Good alignment can lead to a fruitful and lasting collaboration.  

Impact on Corporate Governance  

The entry of a new investor can bring changes in corporate governance, such as the appointment of new board members or modifications in decision-making processes. It is important to manage these changes to contribute to the improvement of business management.  

Potential for Conflict  

Despite the numerous advantages, it is essential to be aware of the potential conflicts that may arise. Differences in opinions on strategy, operations, or exit timing can cause tensions. Having a good governance agreement and open communication can help manage these conflicts.  

Meeting a Diverse Range of Investors  

An often overlooked yet crucial aspect of attracting investors is to engage with as many potential investors as possible. By meeting a diverse range of investors, you benefit from a wider array of options and gain exposure to different perspectives and investment approaches. This process helps you understand the varied expectations and strategies that investors might bring to the table. This will allow you to make more informed decisions about which partnership aligns best with your company’s goals. Additionally, these interactions can enhance your ability to recognize and adapt to different views, ultimately contributing to a more flexible and robust business strategy.  

Complementary Skills Brought to the Table  

Investors often bring complementary skills that can greatly benefit your company. These can include industry-specific knowledge, technical expertise, or experience in scaling businesses. Such skills can fill gaps within your existing team and provide new insights and solutions to challenges your company might face. Leveraging these complementary skills can lead to more innovative approaches and better overall performance.  

Long-term Mentorship and Guidance  

Beyond financial contributions, investors can serve as long-term mentors, offering ongoing support and guidance. Their experience and insights can help steer your company through various stages of growth, providing valuable advice during critical decisions and periods of change.  

Cultural Fit and Values Alignment  

Ensuring that investors share similar values and cultures can be crucial for a harmonious and productive partnership. An investor who aligns with your company’s ethos can contribute positively to the organizational culture and help maintain a cohesive vision and mission.  

Exit Strategy Considerations  

Discussing and planning the exit strategy with potential investors early on can prevent future conflicts and ensure alignment on long-term goals. Clear agreements on exit conditions and timelines can help manage expectations and reduce the risk of disputes later in the partnership.  

Integrating an investor into your company’s capital is not a decision to be taken lightly. It is a move that can bring enormous benefits but also requires careful planning and relationship management. Money is much more than just money when it comes to investments: it is a catalyst for growth, knowledge, and opportunities, but a source of new challenges and responsibilities.  

My Journey in the World of Finance  

I also want to share with you my journey in approaching the world of finance. There was a time when I was highly skeptical; it was a distant world to me and, like all things unknown, you end up being wary of it if not outright fearful. Today I can say that my experience as an entrepreneur has been very positive. I have met qualified, capable, pragmatic people who have always been of great help in the important decisions of my companies.   

Educate yourself about the world of finance. You do not need to become an “expert”. It is fundamentally important to understand the mechanisms and language of the financial world. One aspect to be mindful of is ensuring that the enterprise does not become a mere tool of finance. I believe that finance should be at the service of the enterprise. This has been my experience, with absolute satisfaction for me as an entrepreneur and those who supported my projects as financiers.  

I encourage you to meet with them. There is always something to learn. You will understand how your company, sector, and competitors are viewed. Sometimes you will laugh at some excessive approximations from your expert eyes. Be indulgent; continue to listen. Maybe by the end of the meeting, you will have understood that they are not your partner!  

We are used to considering, depending on the company’s evolutionary cycle, which type of investor we need: Venture Capital, Private Equity, Family Office, etc. Each of these comes with different expectations, risk acceptance profiles, and investment durations. In our sector, we need generally patient investors. The agricultural world has times dictated by nature, and they cannot be altered.  

Practical Advice for Entrepreneurs  

Educate Yourself About the World of Finance  

Understanding basic financial concepts is essential for making informed and strategic decisions. This not only improves your ability to communicate with investors but also gives you the confidence to navigate a complex environment.  

Deepen Your Knowledge of Your Interlocutors  

You will likely hear the same stories. Get information on the team that will manage your investment and their market reputation. Building a trust-based relationship is essential.  

Trust Your Instinct but Base Decisions on Data  

While entrepreneurial instinct is important, financial decisions should always be supported by concrete data and thorough analysis. This approach will help you minimize risks and maximize returns.  

Pay Attention to All Contractual Terms  

Often, the focus is only on the price and the valuation offered. Be careful not to let this be the only parameter. The exit condition, when not selling 100% of the company, is very important. You could be forced to sell your company even if the investor holds a minority stake.  

The entry of an investor into your company’s capital can radically transform the company’s fate. It is a choice that requires preparation, knowledge, and the ability to build solid and trusting relationships. Your education and personal experience will be your most valuable tools on the path to success.