Venture services firms are often active on the investment side as well, leveraging their channel partnerships with networks of investors to bring necessary capital to their deals in tandem.
By way of example, Castle (a US-based Venture Services
firm) recently partnered with a Seattle-based retailer of machine parts to the construction industry. The founder had built a solid business with substantial revenue streams but knew that the absence of robust technology had become a significant constraint on the company's growth prospects.
After an initial introduction, he and Castle quickly constructed a program that brought much needed technical and product capabilities as well as financing into the company; the definition of the the term 'value-added investor.'
This was also the case with a UK fintech startup seeking to disrupt the 'expert network' sector that supports hedge funds and consultancies (amongst others) in researching the industries they are evaluating or are active within.
The founders had followed a familiar trajectory. They'd built an MVP (aka Minimum Viable Product) with which they'd validated their initial thesis but, at the same time, realized it was unable to cope with the demands of a scaling business. They needed to rapidly rebuild their platform whilst raising a Seed Round to finance investment in product development and sales.
By constructing a program that combined cash, equity and even a deferred option, Castle were able to move quickly to begin the replatform whilst leveraging their network to find a suitable angel investor to complete the financing.
Castle were also on hand to advise the founders about an overlooked UK government scheme that allows companies to reclaim almost 40% of their technology investment back as R&D expenditure — a beneficial outcome for all parties.
Taken at face value, the companies mentioned above share little as regards geography, sector or business model. Yet the respective founders shared a common desire (to focus on growing their business instead of worrying about operating their technology) and a common struggle (to find the right person or team to help them).