Both Sides of the Table

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Is Strategic Money an Oxymoron?

Both Sides of the Table

The topic of &# strategic&# investors came up. And I had 2 “strategic&# investors in my first company. What is a “strategic&# investor and why do you keep putting the word “strategic&# in quotes? Keep that in mind when you’re thinking about ’strategic’ money.

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Should You Allow “Board Observers” on Your Startup Board?

Both Sides of the Table

Strategic Investors ?—?This In some instances strategic investors prefer not to take board seats as it might be their corporate policy. In other situations they might be writing smaller checks but want to be present at board meetings for strategic rationale.

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Deal with Your Elephant in the Room

Both Sides of the Table

You have a “strategic investor&# who wants to invest in your B round as long as a financial investor will lead. Your A round investors are not stepping up. - I will talk about how to deal with skeletons in my next post – this post only covers issues that the VC will for sure be thinking in your first meeting.

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Good Times Ahead for VC-backed Tech Companies?

Both Sides of the Table

Strategic investors are looking to consolidate their positions : The top 6 buyers in tech & media account for 27% of all purchases. Jamie’s view is that the healthiest company in any sector will still command outsized returns (e.g. Pure Digital to Cisco) but that even the 2nd largest will get much lover valuations.

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Why I Don’t Like Board Observers

Both Sides of the Table

The third scenario I’ve seen is with “strategic&# investors. Strategic is often a euphemism for investors that are from the industry you serve rather than from a purely financial investor. I’ll cover strategic investors in a different post.

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I Just Invested in @Burstly, a Mobile Ad Management Company

Both Sides of the Table

Evan and I met regularly over a three year period from the time he was running Flux, which he sold to Viacom ( who was his strategic investor ). This is his third company that is in this related space and he was an early investor in Adconion.

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Rethinking Board Observers – The Role of the “Silent Observer”

Both Sides of the Table

Some “strategic investors” have rules that they can’t sit on board seats. There are times where you want two partners from a fund to be involved and you give one an observer role. Just know that two partners talking = 2x the board influence. Board observer roles are a graceful way around this.