Squadra Ventures
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Squadra Ventures

5 Things I Wish Someone Told Me About Investors When I Was a Founder

Cofounders Margaret Roth (middle) and Shelly Blake-Plock (left) pitched “on the bus” during Baltimore Innovation Week 2013.

1. Investors back plans, not companies.

2. Investors want to be helpful.

3. Investors expect you to do your due diligence, too.

  • “When was your most recent investment?” — If this was within the last six months, keep going! If they haven’t written a check in over a year, they are likely not actively investing right now and you should shift the conversation to trying to understand how they could be helpful outside of capital.
  • “Why did you invest?” — Expect them to get excited! Hopefully, they’ll talk about the relationship that they have with the entrepreneur, their passion for the space, or how they have been providing support to the company’s growth. This way you’ll get an understanding for what motivates them to invest.
  • “How is the company doing?” — It doesn’t matter if the answer to this is good or bad, it’s just important that they are honest and that they know. If they don’t know, because they haven’t talked to the team in a while or they say something vague, they probably aren’t going to be there when you really need their advice and support.
  • “What is a recent thing that you have done to add value to one of your companies?” — Take the opportunity to see how personal the investor is willing to get. The answer can range from providing advice in a recent board meeting, hopping on a late night call to talk about a challenging situation, or a connection to a significant resource or prospect. You’re looking for them to tell you a story about how they interact with their entrepreneurs to add value.
  • “What is your take on follow-on funding?” — There will be lots of answers to this. Whatever the answer is, it will give you an understanding of not only how supportive the investor is to their entrepreneurs when things aren’t going great, but how active and involved they intend to be for the duration of a company’s journey.

4. Investors will be able to tell your good revenue from your bad revenue.

5. Investors want you to be who you really are.

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Margaret Roth Falzon

Margaret Roth Falzon

COO at Squadra.VC. Columnist at Technical.ly Baltimore. Trying to be here now.