Core Values and Investors
Having lunch with one of my CEO Solutions Roundtable members the other day and the discussion went to equity investments. He had just signed off on a $350,000 cash infusion with a local investor and felt very good about the values and how he and the investors seem to match.
Let’s go back a couple of years ago and a conversation with the same CEO as he contemplated a potential partner coming onboard. The potential partner was well liked, had some great experience in building companies, had the cash needed and seemed to fit.
We had several conversations about the partner, of whom I had not met, about Core Values and did they match. There always seemed to be a slight hesitation from the CEO on this topic and thus more probing from my side to vet out what the CEO really was seeing, feeling and hearing from the potential partner/investor. As the discussion persuade the CEO began to voice the concerns he had concerning values, vison and having the same commitment to the company as he had.
A three month trial period was agreed upon with the new potential partner to continue vetting the relationship. It did not go well as the new partner’s core values were significantly different and significant tensions arose within the three months. They parted ways with no investment.
Back to the new investor and the conversation with the CEO on core values concerning this opportunity. There were specific examples of how the core values of each matched, how they both agreed on how things should be handled, decided and acted upon. I found no hesitation from the CEO this time, rather a calm excitement on how the values seemed to match. Time of course will tell.
One key point that investors do or at least should consider when determining who they invest in, is the establishment, and more important the active engagement of company core values. Every investor wants a return on investment along with the return of their capital, yet what is it that causes that return?
A great product, marketing plan or amazing visionary may attract investors to an opportunity, but what is it that actually provides traction within the organization to produce the return?
Countless times I’ve seen great ideas go nowhere because the leadership simply was not there. No leadership equals no results and loss of investment. A leader with a great vision, strong core values and the ability to put them into action, will provide the ROI needed plus more.
Although many feel these “soft” and “fuzzy” issues such as “core values” are simply noise, I’ve witnessed just the opposite from my clients and their growth. With strong leadership driving strong core values, organizations attract the right people, right customers and often times have the explosive growth.
When vetting the organization you’re looking to invest in, have the serious conversation about their core values, what they mean and how they utilize them to drive the business. Compare their values to yours and how well they match; of course you have to have a good grasp of what your core values as an investor are.
When you find the match in core values, you have one more strong foot hold to move you and the organization to a successful relationship.