When executed well, the venture capital and management team partnership is a highly productive combination, but it will only deliver when the relationship is a truly harmonious one.

There are some obvious and essential starting points (such as closely aligned goals) but, like most relationships, the foundation of a strong partnership has to be mutual respect and trust. If that exists, it removes what is often the greatest source of antagonism – a VC’s desire to be involved in things it shouldn’t and management’s reluctance to let a VC be involved in things they should.

Clearly trust and respect evolve over time, but many businesses forget in the mass of due diligence, lawyers, corporate financiers and negotiations, to build the relationship.  Part of that is simply spending enough time together to build chemistry. Gaining confidence in each other’s capabilities is harder and takes more effort.

The nature of due diligence is such that VCs are more structured about their evaluation of management and often don’t invest if they are not confident of the teams abilities. What is less common is the management team understanding just how diligent they should be when evaluating a potential investor.

Often there is reluctance to question a deal if the price is right, with ‘price’ too narrowly defined in purely financial terms. At Smedvig Capital, we push hard for teams of potential investee companies to spend time with the senior management of our existing or past portfolio companies to understand exactly what they are getting.

A management team should feel confident that their new investors will be genuine partners. An investor that arrives for board meetings, asks if the business is on plan and isn’t seen otherwise doesn’t add much value. Instead, look for an investor that brings extra resource and shares responsibility for achieving goals.

While the management team will have deep insight into their industry, a VC should be well aware of the challenges growing businesses often face and both be able to identify them early, and provide hands on help to deal with them. If the relationship is right, the VC will be the first person a chief executive wants to call with news about the company (good or bad) at any time of day or night.

Strong relationships need multiple points of interaction, with at least 2-4 members of the senior team in regular contact with their investor, both in and out of the boardroom. This helps ensure the VC becomes part of the team, and not just an external investor ‘to be managed’. Critically, it also allows for a more balanced assessment of each other’s capabilities.

Being involved in a growing business is eventful and the relationship between management and their investor won’t always be easy – situations will arise where opinions differ. Being open about conflict (rather than denying it exists) is vital, it allows for open and honest discussion about the reasons each party holds for its opinion. A strong relationship built on trust means a meeting of equals where ideas can be shared, disagreements can be had and ultimately a way forward can be found.

I can’t advocate strongly enough the role of an independent chair appointed jointly by management and their investor. A person with real experience and a track record in the relevant industry adds gravitas and opens doors for the business. This individual should act as a bridge between management and investor, with a foot in each camp to ensure potential conflicts don’t undermine a carefully built relationship.

A fast growing business is an exciting place to be, but the opportunities can come faster than the resources required to take advantage of them. Having a management and VC team working in partnership allows for faster reactions and a better division of tasks. This is a powerful combination that produces powerful results.

Much of this seems straightforward, but executing it day in, day out over months and years is harder than it sounds. That’s why the right ‘price’ for the deal is about so much more than the business valuation.

See also: How to approach a VC – Roberto Bonanzinga is a partner at Balderton Capital and has spent over 15 years working with entrepreneurs in the US and in Europe. He gives some candid advice on how to approach a VC