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Saying yes to corporate investors isn’t always the best way forward

Big money ideas need big money to get started. Yet, accepting an offer from corporate investors might not be what’s best for your company.

Company culture is an important part of a business. It helps you to recruit staff and retain them, while also providing an insight into what you want and what you expect from the company. Teams working in an environment with a strong culture tend to communicate better, perform better and care more.

Although, corporate businesses expect a lot from the startups that they choose to work with. For some, this can mean a complete change of company culture, in order to align the business with the values and expectations of the larger business.

This is certainly the case at Deutsche Bank, where startups working with the financial giant are expected to change in order to appease them.

Corporate investors - Compelo
Wikimedia/Tony Webster

Speaking at Unbound London, Deutsche Bank’s Head of Innovation, Elly Hardwick, gave an insight into what exactly what this means and why it is enforced:

“We have to expect startups to meet the same requirements as we would any other vendor,” she stated. “Even if you are that five person startup working out of a bedroom, that might be fine, but the face you need to present to your customer needs to be a face that they recognise.”

Gaining a corporate client or investor may seem like the biggest of achievements for a startup. However, it isn’t always as good as it sounds.

Corporate investors - Compelo

When should you consider turning down corporate investors?

According to Google’s Head of Marketing Raja Saggi, before you accept a deal, it is important to consider where your company currently is and whether it is the right time to make a change:

“What you want to ask yourself is: am I ready? Am I ready for a six to 12 month commitment, from initial meetings down to final contractions? Am I ready to invest in service level agreements and a services team to support the needs of these large organisations? Quite often you’re not.”

Corporate investors - CompeloCorporate investors - Compelo

The revenue boost generated by working with a large company unsurprisingly turns heads. However, it is important to remember that money isn’t the only thing that your company needs to be successful.

Big changes can damage morale satisfaction, which will quickly undo anything that you gained from the deal. Likewise, rapid expansion too soon can also lead to financial difficulty.

It may seem ludicrous to turn down an offer from corporate investors, but sometimes it is for the best.

Read more:

These are the six qualities investors look for during a startup’s investment pitch

These business ideas will make you a billionaire, according to investors

Female entrepreneurs are treated differently by venture capitalists (and given less)