8. Why is it essential to establish a governance structure?

Kerry Paul
Dec 3
2 min read

The Governance Imperative

Raising funds is one part of the equation. The other is governance—the structures and practices that ensure the company is run responsibly. Securing capital brings obligations. Shareholders are entrusting you with their money, and maintaining their confidence is one of the CEO’s most important jobs.

This is where like-minded investors matter most. If you surround yourself with people who don’t align with the vision, conflict at the board level can paralyze progress. By contrast, when shareholders share the ambition, governance becomes a mechanism for support and oversight rather than obstruction. Attracting capital into a start-up business is a major challenge for the New Zealand entrepreneur.

The Valuation Puzzle

As a business grows, another dynamic emerges: how to value the company fairly. Existing shareholders rightly expect their early risk to be rewarded with higher share values. New investors, on the other hand, naturally want lower entry points to maximize their upside. Balancing those interests is always delicate. Pitching the valuation too high could scare off new investors; too low, and existing shareholders feel undervalued.

Finding that balance requires transparency, strong governance, and above all, the credibility of consistent performance. Company performance like improved sales, a growing brand story, and international partnerships help tip the scales in favour of optimistic valuations.

Looking Back

Securing investment and establishing governance are two sides of the same coin. Investment provides the fuel to grow, but governance ensures the fuel is used wisely. Together, they give the foundation to scale beyond start-up mode into a company with global reach.

Well Established Governance Processes are Essential for Sustaining Support

The lesson? Don’t chase money at any cost. Choose investors as carefully as you choose your team. Look for those who bring not just capital, but alignment and capability. And remember, governance isn’t red tape—it’s the framework that protects both your investors and your vision.

Key Takeaways:

Secure investment early, but prioritize like-minded investors who share your vision.
Angel investors can bring far more than money—they offer experience, networks, and credibility.
De-risking the business in the first 12 months builds trust and draws in further shareholders.
Governance is about more than compliance; it’s about maintaining investor confidence and ensuring alignment.
Share valuations require careful balance between rewarding early risk-takers and attracting new capital.