Good Startup Investor = Good Advisor

In the course of my recent new venture, I have been meeting with investors. What separates the good ones from the bad?

A good investor is genuinely interested in building companies and helping entrepreneurs. In addition to to finding a good return on financial investment, which every VC and angel looks for.

A good investor has walked in your shoes. As a founder, you can identify with him/her and vice versa. This means that they have ideally started a technology company before, or at least managed and grown teams inside larger companies.

A good investor can help you learn new things and meet relevant new people to help you succeed. Which is what an advisor does. If a potential investor does not have the background to help you directly, they should connect you with people who can.

There are investors out there whose educational, professional, and socio-economic backgrounds — or their character — aren’t a match to the criteria above. Even if such investors are affiliated with big-brand schools, companies, and funds, it’s best to avoid them in my opinion.

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