The world of investing can be divided into two types of investments. Dumb money doesn’t necessarily mean that the investor is stupid, but that their investment is purely monetary. Smart money brings money and other benefits to the table. In a recent Yahoo article, Steph Korey discussed some of the other benefits that smart money brings are.
Knowledge in Specific Areas
Many smart money investors are already successful business people, and they have knowledge in specific industries and aspects of the business.
For example, Steph Korey has extensive experience in supply chain management. She was the head of the Supply Chain at Warby Parker and then navigated supply chain development when cofounding Away.
Korey is also familiar with the challenges that are unique to running a business within a multicultural setting. She had a multicultural upbringing herself and formally studied International Relations at Brown University.
When investors offer business owners their expertise, the additional knowledge can greatly accelerate a business’s growth.
Steph Korey’s knowledge of supply chains and multicultural business can help international businesses establish stable supply chains, for instance. While business owners might be able to do this on their own, many would likely struggle and make mistakes. Mistakes can increase expenses and thereby reduce profits, and they also can create dissatisfied customers if the issues are severe enough.
Professional and Business Connections
Given their extensive experience, smart money investors have many notable connections within the world of business. These connections can help new businesses in a couple of ways.
Frist, smart investors may be able to put business owners in contact with potential customers or clients. A phone call from an investor who has an established professional relationship with another successful person could lead to a sales opportunity that a business wouldn’t otherwise have. If a sale is secured, one deal could provide more revenue than a business could anticipate.
Second, investors can sometimes leverage their networks to offer businesses discounted services. These services may come from a company that the investor has a standing relationship with, or they might come from a business that the investor owns part of. In either case, getting discounted IT services, bookkeeping services, or office space can directly benefit a new business’s bottom line.
Business owners generally prefer to retain control of their businesses when partnering with smart investors, but sometimes a deal is structured that an investor has a significant say in the direction of a business. An investor might receive a voting share of a business or a board seat.
Having an investor personally involved in the governance of a business ensures that they’ll give input on major decisions. This can help business owners make more informed decisions, and hopefully avoid some novice mistakes.
Steph Korey Helps Businesses
Steph Korey prioritizes investment opportunities where she can provide benefits like these. She’s able to help businesses much more when she can offer more than merely capital funding.