“Startup Investor Source Smell Test” is Also Very Critical

No question that the potential revenue model should ideally be aligned to the core value or USP of your product! It is one of many smell tests that the entrepreneur has to pass with their myriads of audiences.

One smell test that is often overlooked is the smell test with the Investors. A wrong source of investment capital can be very toxic to the future of the business, if it is misaligned. At the very least, it is a tremendous time waster chasing the wrong source.

A VC type investment in a revenue model that cannot deliver a YOY rapid growth will kill the business. Either it will die in a crash, trying to move beyond its natural pace or be dumped in a hiccup. A potentially nice business ends up biting the dust.

The advent of the new type of Corporation-the “B” Benefits corporation has raised many interesting questions on this issue. Part of it is the relative newness of this form. I am mentoring a “B” corporation and would like to understand the best alignment of investors for it?