Whenever an investor shows his or her belief in you—especially someone with star power—it provides validation and also ignites intrigue among the startup community. It’s not just a popularity contest though. Having the backing of a top VC firm lends genuine credibility to a company. It says that a firm that knows what it’s doing and that routinely gets to choose from the pick of the litter chose you. That says a lot about where you are going.
Of course there are some sacrifices. Having a top VC firm can also mean that you agree to a smaller valuation than you might get from another investor.
When it comes to celebrity investors—whether they are big technology or media stars—the same halo applies, but is less meaningful. Helping a company become very successful is not usually a celebrity’s full-time day job, so while star support boosts interest, it doesn’t necessarily come with experience and actionable advice. Furthermore, there are many smaller VC firms that don’t have as big a brand, but that do an amazing job helping a company scale.
Overall, I am a fan of assembling the best possible talent around you. Remember, not every partner at a VC firm is equally great. Knowing which investors to pick is critical. I recommend staying focused on choosing the people who will be fully committed to the company’s success. That is what makes an all-star team—and a winning company.