Venture Capital & Investing

Be Careful with Strategic Investors: You Cannot Have Every Advantage

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Excerpts from 創業36條軍規 (36 Rules for Entrepreneurs, descriptive title) plus Robin’s commentary (as of December 2023)

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Collected in Robin Shen’s Field Notes · Content type and attribution are shown above

English translation of the Chinese post originally published 2023-12-09. Translated 2026-11-04 with AI assistance. Historical figures and claims have not been updated or independently verified. 中文原文

Reading guide

The opening excerpts urge startups to be extremely cautious about bringing in strategic investors, especially when their related businesses overlap with the startup’s core business. Robin adds that a large corporate investor offers reputation, money, and apparent resources, but those resources may not actually be available. Each business unit has its own profit targets. A startup may also be labeled as having chosen sides, end up serving the group’s strategy, or face intervention in its management. He recommends a mix of strategic and financial investors to create balance and preserve room for the startup.

Key points

  • A strategic investor’s resources may not actually be available to the startup.
  • The investment can signal allegiance or bring management intervention.
  • Combine strategic and financial investors to find a balance.
Trees at different stages of growth with connected roots on cream paper, suggesting patient cultivation and lasting value.
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Full text — English translation

Strategic Investors Startups should be extremely cautious about bringing in strategic investors, especially investors whose related businesses connect with the startup’s core business. Strategic investors tend to use such investments as a competitive tool, so proceed carefully at every step. The most common situation is that, rather than benefiting from the investor’s strategic resources, the startup faces restrictions that make it serve the investor’s strategy instead. #創業36條軍規 (36 Rules for Entrepreneurs, descriptive title) ---- Robin: ‘There are trade-offs in choosing shareholders. You cannot have everything. A strategic investment from a large corporate group certainly looks attractive: reputation, money, resources. Whether those resources can serve you is another matter. Every business unit within a large group is also a profit center accountable for its own performance. The resources actually provided may not match what everyone imagined at the time of investment. Sometimes the large company is still coordinating internally while the startup has already been labeled as having chosen sides. Corporate groups also invest for their own interests, not necessarily from the startup’s perspective. The startup may end up merely serving the group, affecting its future development, or face greater participation—or interference—in its management and direction. My personal recommendation is a structure combining strategic and financial investors. Find a balance between them and create room for your own startup.’

These articles are personal notes, book excerpts, and collected reprints. Figures and events reflect the time of the original publication, are not current information, and do not constitute investment advice.

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