Finding the right investor/business partner is hard. I’ve had good partners and tougher ones. And twice I chose to buy my company back from partners who threatened to stifle its success. The experience taught me several key lessons that any company searching for a business partner can learn from.
Make sure the financials match your goals
Our company’s first partner company invested roughly $330,000 back in 2000, and we grew tremendously. But there was a problem. As is the case with many startup entrepreneurs, my cofounders and I had a grand vision for our company. We weren’t looking to be an SME, we were looking to build the largest and most innovative quality assurance (QA) and testing company in the world.
To reach goals — and not just survive — takes money. At the time, our partner company was in a difficult financial situation. We were growing, but it didn’t have the capital resources to take us to the next level. We took our chances and bought QualiTest back for approximately $3.6 million and continued our quest for investment. If you’re in the process of taking on a partner organization, make sure it has the financial ability that matches the steps you’re looking to achieve on the way to your long-term goals.
Have the same vision
Our next partner was one of the largest companies in Israel — a domestic powerhouse with the cash we needed to expand and take our business to the next level. It looked like the sky was the limit.
Back in 2001 we were still an exclusively Israeli company with almost no business outside the country. With Israel’s population of only 8 million people, we knew that the future was overseas. After its investment, our partner revealed that they saw our expansion plans for the U.S. as too risky (we had a minor…