Founder Friday: Choosing the Right Investor
Inc. recently published an article, How to Choose the Right Investor, According to a Coffee Entrepreneur Who Raised $100 Million. In it, Cometeer co-founder Matthew Roberts shares his insights on how to vet potential investors. Some of the key takeaways were…
- They need to be engaged and interested in your mission
- What value do they add outside of capital
Carta has a more expanded article they published in June titled How to choose the right investors for your startup. In their post, they start by defining the types of startup investors. From there, they advise founders to look at…
- Industry expertise
- Functional expertise
- The investor’s network
- Their track record
- Whether or not the investor has a platform to facilitate your growth
- The terms of the term sheet
In their 2018 post How To Find The Right Investor For Your Startup, Forbes advised founders to look at…
- Matching the right type of investor vs. the stage of the startup
- The investor’s fund performance
- Whether or not they have a history of funding repeat rounds
- How diversified is the investor
- Are they willing to be the lead investor
- How much influence do they have within your industry
- Do your startup’s culture and brand fit their culture and brand
- Will having them as an investor attract other investors
- Are they easy to get along with
- What is their intent behind their investment (related to support and control)
Luckily, information on investors isn’t hard to come by in this day and age. Some of our favorite resources on investors include…
- PitchBook: It’s an expensive tool, but it’s also an absolute beast when it comes to fundraising, data, and for targeting the right institutional investors
- CB Insights: Again, not a cheap investment, but they are the leaders in tech market intelligence. That includes tracking where the “smartest, most innovative investors and corporations are placing their bets”
- Crunchbase: For the money, you’ll be hardpressed to find a better tool for finding investors and tracking investments made in your competitors
And, one piece of advice missing from those articles was to find mentors. Who better to learn from than someone who has already navigated the waters you’re swimming in? There are communities like Founders Network and SaaStr that you can join that are fantastic resources.
One more thing, don’t forget about us when you start seeing that hockey stick growth.