What to look for in an Investor?
October 20, 2009 in Raising Capital
OK. You’ve got a terrific idea and an equally great team to sell the idea. To scale your business model, you then meet with many potential investors, including friends and family, mentors and former colleagues, institutional angels, VCs etc. With such a great idea and team behind, you receive a positive response from everyone. But eventually, you’d have to decide on who should you partner with to turn our vision into reality.
So, how would you decide? Well, here are some tips that could help you in your decision.
Respect:
Are the VCs ‘pitching’ themselves, as much as listening to your own ‘pitch’? If not, there’s a power relationship here that doesn’t augur well.
Speed:
How quickly do the VCs move? Say, they get back to you in less than 1 working day – now that’s quick (and probably an outlier) – but you get the idea.
Trust:
Does the VC inspire trust? Do you feel they will back you as a founder through thick and thin?
Openness:
Deal making is tricky, and things will be touch-and-go at times. Do your potential partners listen well? Are they upfront?
Pragmatism:
Early stage startups are hard work indeed. Will your VCs be pragmatic about when to intervene, when to help, and when to merely observe?
Experience:
Different firms have different strengths – some might appreciate an investing firm with diverse bench of Entrepreneur-turned-partners but some might have a different perspective.
Reputation:
Early stage VC firms don’t have a long historical record, but there are clear trends and experiences you can extrapolate from.
Personal Rapport:
Yes, it’s intangible, but it’s critical nevertheless! It’s the key to any successful long term relationship. As they say, choose your partner wisely! j
- As shared by Amit
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