Trying to control the product roadmap. Strategics do not invest in your company to make a financial return or because they believe in the vision. They invest in you because they think you can fit into their product roadmap. As such, they will try to direct your roadmap to benefit themselves without giving thought to how it could impact you. While suggestions and advice should be welcomed, do not let strategics have any control of the roadmap.
Driving hard terms. Do not under any circumstances give your strategic special rights. They should be treated equally to other investors. We have seen situations where strategics have a veto right over any acquisition, can control future rounds, or have right of first refusal over future offers to fund or buy the company. Hard terms like that are poisonous and should be avoided at all costs.
Strategics move on quickly. Because strategics don’t have a financial motivation, as soon as they think your product is not going to provide the benefit they thought or should they decide to move in a different direction with their own roadmap that doesn’t involve you, they lose interest in you immediately, irrespective of how you’re performing or how they can help you.
Does having a strategic even matter? Actually no. Of the 133 publicly traded tech companies we monitor, only 25 of them had a strategic investor. In other words, 81%of the tech companies in our list didn’t need a strategic to get to the promised land. In conclusion, don’t get excited about strategics. They’re not the great investors you think they are.
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