How Investors with complementary investment interests could discover one another, evaluate a shared opportunity, and explore a potential co-investment relationship through Link2Investors.
Imagine a growing company seeking expansion capital to enter additional international markets.
The company has:
However, the amount of capital required and the company’s international expansion plans make it beneficial to speak with Investors who bring different capabilities to the opportunity.
One Investor may have significant experience in the company’s industry.
Another may have stronger relationships and market knowledge in the geographic region where the company intends to expand.
Rather than viewing these Investors only as separate sources of capital, there may be an opportunity for co-investment.
In simple terms, co-investment occurs when two or more Investors participate in the same investment opportunity.
Depending upon the transaction, participating Investors may contribute different:
The precise legal and financial structure of any co-investment depends upon the particular transaction.
The potential advantage is that an Entrepreneur may gain access to more than capital alone.
The company may also gain Investors whose experience and relationships complement one another.
The Entrepreneur begins by developing a strong Link2Investors Profile and clearly presenting the business.
The investment opportunity identifies information such as:
Company: [Example Company]
Industry: [Industry]
Current Stage: Growth / Expansion
Capital Sought: $[Amount]
Primary Objective: International expansion
Target Markets: [Countries/Regions]
Use of Funds: [Expansion, staffing, marketing, operations, technology, etc.]
The Entrepreneur also prepares appropriate supporting information for Investors who express serious interest.
Investor A reviews the opportunity and sees strong alignment with the Investor’s industry experience.
For example, Investor A may have:
The opportunity is attractive, but Investor A may not have extensive experience in the international market the company is targeting.
Investor A begins a conversation with the Entrepreneur to learn more.
Investor B also discovers the opportunity.
Investor B’s background is different.
This Investor may have:
Investor B may therefore see value in the same company for different reasons.
As conversations progress, the Entrepreneur recognizes that the two Investors could potentially bring complementary capabilities to the opportunity.
Conceptually:
Investor A
Capital
Investor B
Capital
Together
Potential Capital
This does not mean that the Investors will necessarily invest together.
It means there may be enough complementary interest to justify exploring a potential co-investment relationship.
Before any investment decision, the parties need to understand one another’s interests and expectations.
Potential discussion topics may include:
Each Investor should independently determine whether the opportunity is appropriate for them.
Interest is not the same as an investment commitment.
Before proceeding, Investors may conduct appropriate due diligence.
Depending upon the business and transaction, that could include reviewing:
Cross-border transactions can introduce additional legal, regulatory, tax, currency, banking, and jurisdictional considerations.
Qualified professional advisors may therefore be particularly important.
After reviewing the opportunity, several outcomes are possible.
Both Investors determine independently that the opportunity fits their investment criteria and agree upon an appropriate structure.
One Investor decides to proceed while the other determines that the opportunity is not currently appropriate.
Due diligence or negotiations reveal that the opportunity does not meet either Investor’s requirements.
The current transaction does not proceed, but the Entrepreneur and Investors maintain relationships for possible future opportunities.
Each of these is a legitimate outcome of the investment-evaluation process.
If the parties decide to proceed, qualified legal, financial, tax, and other appropriate professionals should help establish the applicable transaction structure and documentation.
The parties should clearly understand:
Link2Investors facilitates connections. The parties remain responsible for conducting due diligence and obtaining appropriate professional advice regarding any resulting transaction.
The value of a professional network increases when members can discover people they otherwise might never meet.
Link2Investors is designed to connect:
Entrepreneurs → Investors
Investors → Entrepreneurs & Investment Opportunities
Entrepreneurs → Service Professionals
A cross-border investment opportunity could therefore begin with something as simple as:
Entrepreneur Creates Profile
↓
Investment Opportunity Is Presented
↓
Investor A Discovers Opportunity
↓
Investor B Discovers Opportunity
↓
Conversations Begin
↓
Potential Complementary Interests Are Identified
↓
Due Diligence
↓
Potential Co-Investment Discussion
Link2Investors creates the environment for the connection and initial interaction.
The members determine whether the relationship should progress.
International expansion frequently requires more than capital.
Companies may benefit from Investors or advisors who understand:
An Investor with strong industry knowledge and another with strong geographic expertise may potentially provide complementary value.
The Entrepreneur should not simply introduce two Investors and assume they will structure the transaction.
Management should remain prepared to clearly communicate:
The company should also maintain organized documentation for due diligence.
Each Investor remains responsible for independently evaluating:
The fact that another Investor is interested should not substitute for independent due diligence.
A cross-border investment may require assistance from multiple professional disciplines.
Through Link2Investors, Entrepreneurs may also connect with Service Professionals providing services such as:
Appropriate professional assistance can become increasingly important as the complexity of a transaction increases.
Industry knowledge, geographic expertise, relationships, and operating experience can also create value.
One Investor may understand the industry while another understands the target market.
Interest in the same company does not automatically mean two Investors should invest together.
Every Investor should independently evaluate the opportunity and other parties involved.
A professional platform can create introductions among Entrepreneurs and Investors who might not otherwise have discovered one another.
An Entrepreneur may have a compelling opportunity in one location while the most appropriate Investors, strategic relationships, or expertise exist somewhere else.
Platforms such as Link2Investors can help reduce those geographic barriers by making it easier for members to discover, connect, communicate, and explore potential opportunities.
A connection may begin online.
What happens next depends upon the people, the opportunity, the due diligence, and the decisions each party makes.
Discover Opportunities. Build Relationships. Explore Strategic Connections.
Welcome to a more connected investment community through Link2Investors.