What Investors Are Right For You?

Fundraising is an important part of the corporate life cycle of both startups and new revenue streams within established companies.  As a part of that the startup CEO must select or reject potential investors.  The CEO of a new venture within an established corporation may be raising funds externally.  If so then that CEO must also select or reject potential investors.  Internally the CEO may have the opportunity to select from alternative sources of funds; government sources etc.

So CEOs of both types of new venture must decide; What Investors Are Right For You?

Ideal Investor Characteristics

Ideally you wish to close investors who:

  • Share your vision for your company (startup new venture or etc.)
  • Understand your market sector (domain) and product category
  • Have experience investing in your sector in companies at your stage in the corporate life cycle   …   And will introduce you to the CEOs of those past investments
  • Can introduce you to those who will help you grow your business to the point that justifies the next round of investment
  • Can introduce you to investors who will invest in your next round of investment
  • Fully agree with you on your plan for your financial exit
  • Wish to have a level of engagement with you that is comfortable for you.  As one example; when you talk with their previous investments; they do not have a history of micromanaging

Summary

It is more difficult to terminate a relationship with an investor than it is to get divorced.  Understand how compatible and aligned you are at a detailed level before committing to an investment.

Please See Also John Gale’s White Paper

Titled Startup Presentations to Angel/Seed Stage Investors and Partners: Recommendations for Best Practices This post is based in part on that White Paper.

  • This White Paper can be downloaded from this Website from the page Business Plans
  • It can also be downloaded from this page on the Angel Capital Association website.  The Angel Capital Association is the leading professional and trade association supporting the success of (US) angel investors in high-growth, early-stage ventures.

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