Maximising entrepreneur-investor partnerships: Lessons from both sides of the table

We talk to Nick Kingsbury, Partner at Amadeus Capital Partners, about maintaining open communication with investors, leveraging their networks and how to attract top talent.

How can entrepreneurs best leverage their relations with investors to increase their chances of success?

Entrepreneurs who want to maximise their odds of success should view their relationships with investors as a dynamic partnership. First, communicate openly and transparently with your investors, sharing both the highs and lows of your journey. Don’t wait for hindsight, tackle problems head-on. Second, tap into your VCs’ extensive networks, choosing investors with connections to potential customers and the resources to supercharge your growth.

Finally, remember that it’s fine to seek help when needed. Don’t hesitate to ask your investors for introductions, partnerships, or whatever specific support can propel your venture forward. In the world of entrepreneurship, collaboration with investors isn’t just about funds; it’s about strategic synergy and mutual success.

What qualities are you looking for in start-up teams?

When evaluating start-up teams, I prioritise a combination of key qualities that I believe are essential for success. First and foremost, it is crucial to have a crystal-clear vision that’s both captivating and purpose-driven, as it helps start-up teams navigate challenges more effectively and inspire others to join their mission.

Equally important, especially when it comes to instilling confidence in potential investors and partners, is being able to demonstrate a high level of authority and expertise in your chosen field. This also helps the team make informed and competent decisions at each stage of growth.

The ability to attract top-tier advisors and hires is also a testament to a team’s credibility and potential, and something investors will look for. A team that can secure the interest of respected experts and talented individuals is more likely to have the necessary support and human resources to execute its vision effectively.

Finally, you can never escape from taking more intangible qualities into account when considering whether to invest in a company, such as compatibility of working styles, healthy and honest culture communication and the temperament of a founding team.

How and why did you decide to enter the venture investment business?

My journey as an investor started when I came across 3i, while I ran my own business and was considering fundraising. I liked the team and what they were doing seemed really interesting so when I was looking for a new role and saw the 3i job advert I applied!

At the time they were looking for people who had run businesses to work with the investment team. It seemed like a wonderful opportunity to get much broader business experience; I hadn’t got an MBA, and this seemed like it would get me the same skills and more, and get paid while doing it!

Can you share some of your insights from working on both sides of the market?

Something that continues to frustrate me with VCs, which started during my time working inside start-ups, is when the answer to any issue is to request better data and ask for additional reports. The truth is that an early-stage business very rarely sits on statistically significant data, given that the number of customer opportunities they can analyse is usually small. Rather than generating reports, you need to focus on the issue of whether customers A, B and C are signing contracts and starting the implementation in the first place.

I’m therefore always conscious of the danger that we (VCs and board members) create unnecessary work for the team; we need to make sure we avoid that while still providing appropriate challenges and support.

What are your top three suggestions to founders that we wished you knew at the start of your journey?

1. It’s crucial to maintain a resolute focus on the bigger picture. Ambition fuels innovation and propels your team forward. By consistently aligning your actions with long-term goals, you can steer clear of short-term distractions and stay on course towards achieving success.

2. As a founder, fostering a collaborative environment where team members have a voice in decisions that impact them can lead to enhanced creativity, ownership, and job satisfaction.

3. While a compelling vision is essential, pragmatic revenue generation is equally vital for sustainability. Often, the allure of cutting-edge technology can overshadow the need for practical, revenue-generating solutions. Striking a balance between innovation and profitability involves augmenting your vision with strategies that cater to the immediate and long-term financial health of your start-up. Sometimes, the “boring” solutions are the ones that ensure consistent revenue streams and overall stability.

What can we expect to see in the VC fund and tech start-up space in the coming months?

I think we can expect to see more of the same; what always keeps me optimistic is that whatever the macroeconomic weather, inventive entrepreneurs will keep starting businesses. For our portfolio at Amadeus, there is now greater emphasis on having a clear path to profitability – even if we choose to raise more capital, you still want to be able to manage without it if the funding climate is tough. For new investments, the opportunities in AI and Quantum are super exciting, but also cybersecurity and other technologies that can make our world safer.