In the first two posts of this series, we explored how patience and time are the tools of a warrior focussed on winning the war rather than an individual battle. Patience and time remain as tools in the arsenal for an entrepreneur. The key is to find a source of capital that captures patience and time to bolster your effectiveness as a business leader.
It can be difficult to deliver a resilient and growth-oriented strategy in the face of short-term expectations from investors. As an entrepreneur, patient capital fills financial necessity with the added value of being a strategic asset.
Better decision making
Patient capital makes you a clear-sighted decision maker.
An entrepreneur backed by patient capital is a more effective leader. Patient capital investment is conducive to giving entrepreneurs the confidence and stability to make wise business decisions.
Inappropriate risk-taking is reduced and the stable growth of recurring revenue is encouraged. Patient capital allows an entrepreneur to invest in innovative and creative strategies for the future. The focus is no longer on making the quickest sale, but rather making the move that puts your business in the best position going forward.
When used correctly, patient capital becomes one of an entrepreneur’s most powerful bargaining chips.
You can approach a deal with more confidence and an ability to walk away if the terms aren’t right. This applies through and through, from sourcing deals all the way to eventual buyouts. It applies to your customers, being able to build the relationship, bypassing a small deal today for the big one tomorrow.
In total, the absence of time constraints allows an entrepreneur to find the best solution for their business, their clients, and their investors.
Backed by patient capital, time is an asset.
Your entire business ecosystem thrives.
Rather than answer to your investors, depend on your stakeholders. We discussed in the last post that the patient capital investor is more than a shareholder, they are a stakeholder.
Stakeholders have a genuine interest in making your business prosper. They offer advice, connections, experience, and guidance. They add value instead of extract it.
This is because stakeholders are more likely to benefit in a patient capital environment. Entrepreneurs can grow their business by working with their investors, peers, suppliers, and customers along the entire value chain. Without a need to provide short-term investor returns at the expense of the other stakeholders, the company operates in a less risky environment.
A recent study that looked at 736 SMEs for six years found that, with the backing of external capital, an external manager is the most successful framework for achieving sustainable growth.
Perhaps you are a current business owner looking to step back from the intensive management role. Maybe you are an ambitious young executive seeking a worthy ship. What you have in common is a vision for a resilient business and long-term growth.
Where these players meet is a recipe for success.
With the backing of patient capital, an entrepreneur’s time is now. You are prepared for the long game and prepared to win the war. In the final post of this series we will look at how to harness patience and time as an investor or as an entrepreneur: through search funds.