Entrepreneurs attempting to scale their companies can often feel desperate for investment funding. Burn rates can be high and runway rapidly decreasing. The temptation to meet with any and all angel investors can be high.
But not all angel investors are worthy of your time. Some investors can be decidedly dismissive to entrepreneurs, regardless of their reputation as being founder-friendly. If you’re contemplating outside funding, following are five warning signs an angel investor doesn’t respect you as an entrepreneur.
They try to pressure you into accepting them as an investor without allowing you a reasonable length of time to consider their offer
If an angel investor thinks they can bully you into accepting their investment, they don’t respect you as a founder or business partner. They’re likely trying to nail down your company for their portfolio before other investors get a chance to invest in your company. Walk away. There are plenty of other angel investors available who will appreciate you and your company without making you feel like you have to ‘sign on the dotted line’ immediately.
They don’t do their homework prior to your meeting and have little understanding of what your company offers
If an angel investor attends a meeting with you and your team with little to no understanding of what your company offers, they’re sending you a clear sign you’re not important enough to warrant adequate preparation. A reputable angel investor will have performed preliminary due diligence on your company and will at least know the vertical you’re in and who your competitors are.
They discuss your meeting on social media in a sarcastic manner
If you’re considering accepting funding from an angel investor, pay attention to how they behave on social media. Sarcastic comments regarding their latest meetings or sub-tweets mentioning an unnamed entrepreneur can be an early warning sign of trouble. Some angel investors have let their job description go to their head. They think because they control the proverbial purse strings, they’re better than up-and-coming entrepreneurs. If an angel investor is criticizing you anonymously on social media, take your company elsewhere.
They have a junior associate meet with you instead of attending your meeting in person
If you walk into an investment meeting only to be greeted by a junior associate, you might not be high enough on an angel investor’s priority list. Unless you were told in advance you would be meeting with a junior associate, the time is right to go elsewhere for financial funding. Explain why you’re leaving and seek other investors for your company.
They arrive late for your meeting without explaining their tardiness
If an angel investor keeps you waiting and doesn’t have a good explanation for their tardiness, they don’t value your time. If they’re late for an initial meeting to discuss funding your company, just imagine how the rest of your business relationship is going to go.
Just because an angel investor agrees to meet with you, that doesn’t mean they intend to invest in your company.
They could be attempting to glean information for a competitor of yours or attempting to boost their reputation as an insider with plenty of deal flow.
Trust your instincts. If you feel like an angel investor doesn’t respect you as an entrepreneur, chances are you’re right.