Stop looking for strategic investors

Founders are always looking for “Strategic Investors” and corporate VC. The view is these investors provide not only capital, but also guidance on the product roadmap, engineering/dev resources, critical introductions, and they’re often customers themselves. So are Strategic Investors critical to success? No, definitely not.

To arrive at that conclusion, we looked at the major investors in 200 tech companies prior to going public. We found that only 32 had a strategic investor. The remaining 168 companies had only traditional VC or financial institutions as investors, but no strategics. In other words, having a strategic investor was not critical to making it to IPO for 84% of the companies we looked at. The data is below.

While there is certainly value in having strategic investors, based on the low density of strategics invested in tech companies that have gone public, they’re not critical to success. What’s more important is to find investors that help when they can, are supportive (both financially and emotionally), and know when to step out of the way and let you do your thing.

Thank you for reading. Visit blossomstreetventures.com for more SaaS metrics and blogs.