Finding the Right Investors
This post is part of the Entrepreneurial Education Series, which brings together successful, influential entrepreneurs and investors to teach entrepreneurs everything they need to know about early-stage investment through events, articles, videos, and more. If you are interested in learning more about raising a round, register for “Early Stage Investment 101” on June 17.
As an entrepreneur, you’ve probably heard the phrase “don’t just take any money, take the right money” at least once, if not more. The idea behind it is simple: when you accept capital from investors, you’re agreeing to a long-term partnership. Naturally, picking the right partners is critical to the success of your business, especially when capital is on the line. So what should you look for in your investors?
Shared Vision
The right investor will buy into the vision and will begin working with you to realize it from the beginning. This will likely mean suggestions and strategies for building your company even before you sign documents.
Investment in Your Growth
You might think that all investors are committed to helping you grow — after all, how else would they get a return on their investments? But some investors are more committed than others. How hands-on do they get with their companies? How much capital do they actually have to invest? Ideally, your investors are dedicating both human and financial capital to help you grow. Not all investors will, of course, but in that case, know ahead of time before you make a commitment.
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Industry Experience
Do your potential investors understand your market and the space you are operating in, at least on a high level? Can they take skills they have honed over their own careers in similar industries and apply them to help you build your business? Can they explain what you do and why it matters for the industry without extensive prepping from your team?
Industry experience isn’t necessarily a “must-have” for every deal, but some experience along with a basic understanding is important. Good investors should add value by providing actionable advice for growing your business and effectively communicating your value to other investors and partners as you expand.
Key Networks and Connections
Investors who can turn your cold leads into warm ones by tapping into their relationships are tremendously valuable. As you evaluate investors, ask if they are linked into the right networks — the ones that will connect you with the new customers, strategic partners, and talent you need to succeed.
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About Hyde Park Angels
Hyde Park Angels is transforming early-stage investing by taking a people first approach. The organization is the largest and most active angel group in the Midwest. With a membership of over 100 successful entrepreneurs, executives, and venture capitalists, the group provides critical strategic expertise to entrepreneurs and the entrepreneurial community. Nearly 40% of our members have founded a company, 88% are CEO’s, top executives or corporate board members, and 100% invest in startups. By leveraging the members’ deep and broad knowledge of multiple industries and financial capital, Hyde Park Angels has driven multiple exits and invested millions of dollars in over 40 portfolio companies that have created over hundreds of jobs in the Midwest since 2006.
About the Authors
Alida Miranda-Wolff
Alida Miranda-Wolff heads up communications and strategy at Hyde Park Angels, crafting and disseminating the organization’s brand in all forms across all channels. In addition to single-handedly building HPA’s integrated communications plan and executing its core elements, Alida manages membership, partnerships, portfolio company support, and all community engagement.
Prior to joining Hyde Park Angels, Alida served in a variety of journalism, marketing, communications, and management roles, specializing in creating spreadable multimedia content for tech-enabled businesses at all stages. Alida has run several Kickstarter campaigns, including one of the most successful in Chicago history, and still mentors companies running their own campaigns.
Alida graduated Phi Beta Kappa from the University of Chicago in 2014 with multiple honors and awards. She remains active in the university of alumni network, serving on five advisory boards and committees. Alida is also a published author and poet, with two poetry chapbooks currently in print, Domestic Scenes and Tree Fingers.
