Collective negotiation power: A decisive advantage when investing with SeedBlink
This power is shown when structuring the deals, the investment documents, or more generally when negotiating the rights SeedBlink’s SPV will have once it pours its capital into the startup.
Editorial written by Ionuț Pătrăhău, Managing Partner & Corporate Development @ SeedBlink. In addition to his vast experience in banking, Ionuț Pătrăhău also worked in the medical services field, being former CEO of the private health network Regina Maria and co-founder of the Brain Institute, a neurosurgery center developed in partnership with the Monza Hospital.
In the last years, I have emphasized many times the great advantage offered by digital products, i.e. the ability to create the “network effect”. This leads to spectacular results in terms of increasing the number of users from hundreds to thousands in “brick-and-mortar” businesses, and millions or even billions in businesses creating digital applications that become viral on the internet.
This network effect has two main results for businesses in this field:
(1) adding global value, which generates high growth income potential and transforms geographies and borders into mere theoretical concepts.
(2) vast economies of scale due to the leverage of costs, especially the fixed ones that remain almost at the same level even if the sales are increasing exponentially.
As the network effect is one of the secrets for a successful digital business, we should note that any advantage brought by the economies of scale has also two sides. The first one – as already mentioned, refers to having the fixed costs at the same levels even when sales are much higher. The second one, however, is a crowdinvesting advantage – in general, and a decisive advantage if investing through Seedblink – in particular.
We’re referring here to the collective negotiation power, exponentially stronger and more consistent than any individual abilities. This power is shown when structuring the deals, the investment documents, or more generally when negotiating the rights SeedBlink’s SPV will have once it pours its capital into the startup.
These rights obtained by SeedBlink for our investors, turn the latter into individual, virtual VCs – similarly to what happens when we’re helping build portfolios and investment thesis – offering the possibility to make follow-on investments in those successful startups that organize extra rounds.
I felt the need to reemphasize this advantage because part of investing through SeedBlink is about having access to the capital in the incipient stage. While the partnership offered by SeedBlink offers a good number of post-investment advantages, they are assumed by a few investors but overlooked by the large majority. The number of investors in tech companies will grow if, aside from the obvious benefits, the investors get to appreciate the existing intrinsic benefits that are of the same – if not greater – importance, normally requiring expensive lawyers.
At SeedBlink we have built a team of professionals who convert the negotiation potential into reality. We could have left it to chance and become an easy negotiation partner for the co-investors and startups. We have chosen to be as professional as possible instead, knowing that the outcome of any financing program depends mostly on the professionalism of those who negotiate its terms.
All existent investors are invited to enjoy all post-investment advantages extended by SeedBlink. The prospective investors are invited too, having also the certainty that we really care about their rights.
SeedBlink is a full-service investment platform that enables everyday and accredited investors to access curated European tech startups through equity crowdinvesting and angel syndicates.
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By Ionut Patrahau
PublishedOctober 26, 2021