President of Panama-based iPoint Capital Partners, Hilt Tatum IV is responsible for the firm’s investments in Europe, Asia, South America, and the Caribbean. A venture capitalist, Hilt Tatum IV also heads the company’s venture capital operations.
Not all venture capitalists are the same. If you are fortunate enough to secure venture capital, you will have to work with the VCs for a very long time. Therefore, it's important to know who you are giving an ownership stake in your company, and to perform your due diligence.
Many VCs today narrow their focus within a single market, geography, or industry. This is where they feel they have deep knowledge and expertise. Research VCs within your product or service niche. Find out which ones have an impressive track record in your particular market. Afterward, talk to executives in companies they have invested in to find out how involved they were in the businesses. How much value did they add to these firms? Did they take part in growing the company and providing solutions for some of its problems, or did they just hand out capital and become unavailable afterward? What about their business philosophy and preferred growth and execution strategies - do they match your own? What about any potential conflicts of interest - are they shareholders in one of your competitors?
Looking for a VC is like looking for a spouse - you have to court each other first before you sign on the dotted line. And when you do decide to pair up, be open and set clear expectations. Do not be vague about vital elements of the contract such as exit clauses. You want a VC who won’t exit at the first sign of a challenge.
Hilt Tatum is CEO of Oxford Consulting Group - International business consulting