Are Strategic Investors More Important in a Downturn Economy?
First, let’s define a strategic investment. A strategic investment is one that’s made most often by a company in your industry, and in some cases a competitor. I don’t think most startups look at strategic investment opportunities - they pursue angel and VC investors first - but in a downturn economy, do strategic investors become more relevant?
A lot of venture capital money is being held onto by VCs, or being invested into their existing portfolios. Angel investors will be a bit more wary as well; they’re seeing their stock market portfolios taking a beating and will have less investment money to deploy. But strategic investors, assuming their businesses aren’t totally collapsing, may have small war chests and see opportunities to jump in and support startups.
Jason Mendelson and Mark MacLeod both provide excellent insight into the pros and cons of strategic investors. Generally Jason and Mark aren’t overly positive, and it’s easy to see why:




