Is Your VC Still Hungry? How to Find the Right Partner for Your Early Stage Startup
— Reid Christian
We’re often asked how a founder should pick the “right” investor. Do you prioritize experience, past successes, personal connections, your gut? There are no right or wrong answers. But investors put a lot of time and research into selecting portfolio companies, and founders should do the same when considering who to partner with. Your investors should be fanatic about your vision, an evangelist for your product, and want to hustle for you every day. Here are some of the questions we think founders should ask when talking to VCs.
1. Will this VC hustle as hard as I do? Can they help me get my company off the ground?
In the early days, your investor should be a partner, not an opponent. The right person won’t just be inspired to help you hustle, but will hustle right there with you. Your investor will be a key source of support during the early stage — when you’re focused on hiring the right team members, achieving growth goals, and making investments into your company.
Look for people who are still hungry to help. Does the investor share ideas and potential strategies? Is it clear to you how they can help change the trajectory of the company in the next 6 months? While there are many people who can help you afterward, a great investor will have a low-ego approach and work hard to help you handle the early stage weight that comes with being an entrepreneur.
2. Is the VC’s full partnership excited about my business, and will I have access to their help?
An investor’s personal network is an important strength to consider. While it’s a good idea to see how many investments the person has made and whether or not they’ve been successful, it’s also valuable to think about the entire firm and how it’s structured. Many venture firms have a hierarchical structure, which means that work with a VC will be mostly limited to that investor’s specific area of expertise, their experience, and connections. A flat structure, on the other hand, encourages all investors on the team to work together to help a founder and portfolio company succeed.
I tell entrepreneurs who are raising capital to ask questions about the firm’s partnership. Founders who have access to a full partnership receive additional support, mentoring, access to a wider range of connections, and resources.
3. Does this VC really get my vision?
A VC will put in the effort to understand your industry, space, and vision. But will they personally use your product? Have they felt the pain points you’re trying to solve? Do they show genuine excitement about your idea? Look for someone who wants to see customer or user data, asks for product demos, does their own research, and taps their personal networks to make sure they have a good grasp on what you’re building.
An ideal investor gets your vision, will show patience when product issues pop up, the market or industry changes, or growth takes longer than expected. They’ll also take the time to share what they’ve seen and work with you to prevent any potential pitfalls. They should be eager to help in the near-term and carry that through with patience in the long term.
4. What do references say about the VC’s heart and hustle? Do they speak highly of work style and their character?
Investors should offer you references you can call, and if they don’t, ask for them. Anyone worth working with will support your request and shouldn’t have anything to hide. Talking with references will give you insight into the investor’s personality, working style, and expected communication cadence (often overlooked!). You’ll be able to hear directly if the person is empathetic, honest, and dependable — someone you can count on having in your corner.
Also, why not ask for references of founders of companies where it hasn’t gone well, or better yet see if you can talk to founders that chose not to work with that partner? Did they like the investor, but make a more natural connection somewhere else? Did they choose to work with another firm because of more favorable terms? References are easy to find when a company is thriving, but you should aim to uncover if the person you’re talking with will have your back during tough times or when your chips are down.
Searching for a VC is about more than raising funds. It’s about choosing a partner to support you and help you execute your vision. Ask for the time you need, whether it’s an extra conversation or a chance to have dinner or a drink together after a meeting or a workshop. The right investor won’t just welcome the chance to learn more about you, your product, and your company, but will appreciate the time you put into connecting with them, too. In the early stages of building a company, finding a VC who believes in you and who will hustle every day to help you, cannot be underrated.
