There are many reasons why companies fail: poor product-market fit, failure to manage cash, misguided strategic direction--the list goes on. Many startups raise money for the sake of having funds to achieve business goals, but when it comes time to reinvesting that cash, they're not sure where to turn. That's the hidden story behind startup failure rates in Silicon Valley and everywhere else in the world.

Money isn't the solution to our entrepreneurial challenges. That's why, from day one, my co-founder Simon and I sought out partners rather than just investors.

At a glance: our fundraising journey

Over the three and a half years that we've been in business, we've gone through multiple funding rounds. Most recently, we closed a Series B round led by Bessemer Venture Partners with participation from Union Square Ventures, SoftTech VC, VersionOne Ventures, and 500 Startups.

We sought out industry experts who would ultimately guide us, collaborate with us, and help us take Shippo from an idea, to a company that helps its customers grow 71 percent year-over-year in volume shipped.

But these partners were not easy to find. We've come a long way since our earliest days in 2014. For our seed round, we delivered more than 100 pitches. We navigated the "nos" we received on our path to "yes." Many more yays and nays later, we've been selected by eBay, Tuft & Needle, GOAT, Ipsy, Loot Crate, Marley Spoon by Martha Stewart and thousands of others to ship.

What we've learned along this process is to never seek money for the sake of money. Instead, we choose investors who are committed to helping us grow. Here's a look at how we found these partners and the lessons we learned along the way.

Don't give up--use rejections as an opportunity to practice

Plenty of investors turned down our business idea in its earliest stages. But rather than feeling discouraged, we used each opportunity to practice. Our first 25 pitches were terrible. Our self-confidence was not high enough. The next 25 gave us room to practice. The next 50 were strong, but we realized that we weren't talking to the right prospective investors.

Over time, Simon and I noticed compounding interests from our efforts. The more people we'd meet, the more they would talk about us to each other. Along the way, we met more people. After many months, we found partners who not only wanted to invest, but more importantly, cared about our business and vision.

Be uncomfortably selective

There's a perception among founders that we should take any money we can get. This line of thinking gets people into trouble. Investors remain a part of your company, as partial owners, for as long as your venture exists.

Don't sign any terms sheets or contracts that make you uncomfortable. Make sure you have legal guidance.

Request referrals from other VCs and founders. Call up references and ask for stories of how investors have responded during both good times and bad times. Ask about the worst thing that the investor has ever done.

In addition to requesting referrals, you should conduct your own backchannel references. Start by finding founders of businesses that may have failed. Then uncover how the investor reacted. Was the investor still accessible and responsive?

If not, that's a big red flag. It's the tough times when you'll need strategic direction from your investors most. Individuals who care will work with you through turbulence and help you problem solve so that you can take every step you can to avoid failure.

People are always going to be interested in your company when you're doing well. But what happens when you need help?

Make sure you have common values

Every investor will look at your business from a different perspective. Some investors take the vantage point of an engineer, for instance. Some care about customer satisfaction metrics. Believe it or not, others don't.

If you're considering working with an investor, you need to have an upfront conversation:

  • What do both sides of the table care about?

  • What will be your workflows in terms of regular communication?

  • What is her management style?

  • How up front is she with information?

Money is only part of the equation in a VC relationship. Be selective to keep your business healthy too.