Approaching venture capital or angel investors is never easy, and getting interest in your small business can be exciting. However, not all investors are created equal. It’s vital to ensure that your potential investor is actually a good fit for your business – and will help rather than hinder.
Here are some things to look for in a potential investor:
Attitude – Do they have a real interest in helping you build a successful company?
Reputation – Research, research, research. What are they like? Who have they helped? What do people think about them?
Experience and education – Can they offer real experience or a strong, relevant education?
Their commitment – How busy are they? Do they actually have time to work with you?
After your potential investor has gotten to know your business, you can ask certain questions to get to know them better. Here are some examples:
- What do you think of our business model? What have we missed? What are we doing well?
- Have we missed any competitors in our analysis that you think may be a problem for us?
- What would you change about the way we’re doing things? Why?
- How strong is our team? Who or what are we missing?
- How much do you think our company is worth? How much would you be prepared to invest?
Take your time and carefully research their background and track record. Nobody’s expecting you and your investors to be best friends, but there should be good chemistry between you. If there isn’t, keep looking.