In a prior article, I mentioned that everyone who shows up in your board room should be aligned around company goals.
CEO of Paystone, Tarique al-Ansari, has built an incredibly successful FinTech company that provides payment, loyalty, gift card, and customer engagement solutions and has built this alignment with his investor group extremely well. He explained this in the perfect simple way for me:
"I could tell I found a great fit with my investors because they were aligned with my exit goals and timeline expectations. I looked forward to spending time at dinner with them after board meetings were done. It didn't all feel like work."
The start of a growth equity investment is truly the beginning of a long term working relationship between founder and investor. Different than angel or syndicated VC rounds, where investments may be more passive, a growth equity investor usually expects to take at least one board seat, has voting rights, and overall spends a lot of time with a founder.
Why does fit and alignment really matter? In my experience, there are zero companies who have gone "up and to the right" from day one. Even the successful ones occasionally lose a customer, key employee, or just have a rainy day. An investor who is a really good fit for the business has seen this all before and isn't surprised by it, has your back and is a good sounding board on both good and bad days. They can credibly say: I may not have gone through exactly what you're going through, but I can empathize and connect you with people who have lived it.
There's a lot of upside to an investor and founder relationship that really works. It enables you to move faster, avoid (some) mistakes, and overall have more fun.