Strategic Money Filter
Choose investors for the capability they add, not merely the capital offered
- Difficulty
- Advanced
- Time to result
- ~months to results
- Steps
- 5
- Confidence
- 92%
The Strategic Money Filter begins with a refusal to treat inbound investor interest as a reason to raise. The company first asks whether it needs capital and, if not, identifies the knowledge, access, localisation, distribution, or operating capability that could justify a partner. It then screens investors for that contribution and considers the long-term board relationship and control implications, not just valuation or cheque size. Frank Body spent roughly two years learning through investor conversations before focusing on strategic partners. Unilever provided an early strategic relationship, while later private-equity investment was connected to the company's effort to enter China with localisation knowledge and a Shanghai team. The framework makes strategic fit an explicit input to investor selection; it does not imply that every strategic investor or geographic expansion will succeed.
Origin
Frank Body was profitable early and did not initially need outside capital. After extended investor conversations, the founders shifted their search from money alone toward partners that could contribute strategic capabilities, including support for expansion into China.
Core principles
- 01Capital without a defined need is not automatically useful
- 02Investor capability should match a strategic gap
- 03Patient selection can be better than fast fundraising
- 04Board relationships outlast the funding event
How to run it
- 1
Test the need for capital
State what external money would enable and whether the company can reach the objective without it.
Pro tip Separate flattering inbound interest from an actual financing need.
Watch out Taking money creates obligations even when the cash is not necessary.
- 2
Name the capability gap
Define the knowledge, access, local team, distribution, or operating capability the company lacks.
Pro tip Tie the gap to a specific strategic objective or market.
Watch out A vague desire for strategic help is not a selection criterion.
- 3
Screen for strategic fit
Evaluate whether each investor can credibly supply the missing capability in addition to funds.
Pro tip Look for demonstrated operating assets and relevant relationships.
Watch out Brand-name investors may not provide hands-on support after the deal.
- 4
Assess the lasting relationship
Examine governance, board participation, control, incentives, and how the parties will work together after funding.
Pro tip Discuss operating decisions before legal terms make the relationship harder to unwind.
Watch out Strategic value does not erase dilution or governance risk.
- 5
Select slowly and deliberately
Choose the partner whose capabilities, terms, and working relationship best fit the stated objective, or decline to raise.
Pro tip Learning conversations can be useful even when no deal follows.
Watch out Do not let prolonged courtship become an unbounded distraction.
In the wild
Frank Body accepted investment from a Chinese private-equity firm while pursuing China. Jess said the company lacked the knowledge and skill set to enter alone, while the partner could support localisation, provide a Shanghai team, and help manage that operation alongside the founders.
→ The investment combined capital with local operating knowledge and infrastructure for the expansion effort.
Common mistakes
Raising because attention feels validating
Investor interest can be flattering without serving a real company need.
Calling any cheque strategic
Strategic value must map to a concrete missing capability, not an investor's reputation.
Ignoring the board relationship
The investor may influence the company long after the money is spent.
Is it for you?
Best for
It is best for companies receiving investor interest while pursuing a market or capability they cannot access alone.
Not ideal for
It is not ideal for urgent rescue financing where survival, terms, and speed dominate strategic fit.
From the transcript
“we didn't know what we we didn't need the money so I thought what are we having these conversations for”
“what we wanted was not necessarily just money but strategic money”
“we didn't have the skill set or the knowledge to push into China ourselves”
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