How EPOCH Pi Helps Founders Identify Values-Aligned Investors
Behind every company are human beings; running day-to-day operations, managing public perception and weathering the inevitable ups and downs of business. Ultimately, no matter the industry, people work with people and not obscure entities.
When it comes to raising capital, mergers and acquisitions, and buying or selling companies, identifying appropriate partners with which to work is, paradoxically, in the interest of all parties. While financial terms and price are important, owners should also evaluate the alignment of values, things like: core values and organizational purpose; leadership style and people philosophy; decision making and measurement; communication styles as well as conflict and collaboration.
EPOCH Pi Co-founder Lynn Carpenter likens business transactions to entering into a marriage.
“Marriages always hit rough patches — there are times when things don’t go according to plan and when things are stressful,” she explains. “So, evaluating potential partners on aspects like core values, leadership style and philosophy is an important part of the decision-making process.”
At EPOCH Pi, Lynn and her team take a different approach to traditional investment banking service offerings. One of the steps to their methodology, whether their clients are looking for strategic partners, financial partners, selling or recapitalizing their business, is using a purpose-driven lens to identify philosophically-aligned parties.
While financial terms are paramount, facilitating clients’ due diligence into the prospective investors or buyers as a way to preserve mission and vision is in the best interest of both parties in the long run.
“We understand that entrepreneurs need to raise capital first and foremost,” says Lynn. “But asking questions surrounding culture and purpose enables the disclosure of intangibles that might not show up otherwise ”
Finding the right fit through cultural assessments and value alignment tools ensures that both parties share a similar perspective and creates a win-win situation.
Once commonalities are identified and agreed upon, they can be included in the transaction structure or legal documents such as term sheets, LOIs, conscious contracts, and transaction documents.
“Acknowledging core values in legal documents provides a foundation and moral obligation of what the two parties are trying to accomplish together,” Lynn points out.
Any well-conducted business negotiation is essentially an exercise in evaluation and judgment — learning about the other and determining compatibility by asking the right questions to better understand what’s most important to a potential partner. Questions such as:
Why do you believe people work for you?
What are your core values?
How do you define a successful investment?
How would you deal with a non-performing investment?
EPOCH Pi’s process of incorporating purpose and mission enhances the experience, eliminates partners who aren’t aligned at the outset and facilitates drivers of mutual benefit.
Recently, Lynn sat down with Francesco Barbera of Barbera Corporate Law, a California-based law firm representing emerging growth technology companies, to discuss how entrepreneurs would be better served by values-aligned investors, acquirers and strategic partners.
What the full video of the conversation below: