Looking For an Investor? Here Are Types to Avoid.

“Most founders have a tough time sussing out who’s going to be good and bad while fundraising,” says David Olk, in this week’s column for Inc.com. Luckily, “If you’re paying attention, red flags will pop up.”

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In your hunt for potential investors, you’re bound to run into a few bad eggs. They easily stick out and we’ve all met them (and most of them don’t even know they suck — no one tells them).

You’ve also come across great investors. They’re responsive, helpful, and when they do “pass” you’re still excited to send them other opportunities. They ask that insightful question you’ve never heard before, even after 20 meetings. They close quickly and don’t try to extract ownership with unreasonable terms or “New York term sheets.”

What happens when it’s not that clear though? Most founders have a tough time sussing out who’s going to be good and bad while fundraising.

Remember, you’re the one who has to work with these people for years to come. I’ve heard too many stories of investor regret — total pains in the ass who aren’t as genuine as they originally seemed. The good news: If you’re paying attention, red flags will pop up.

Here’s what to look for:

Excessive information requests.

Obviously, investors have to look under the hood. But, most of the time, your business is not rocket science (I mean, unless it is — in which case, forget this one).

I can promise you that your business is easy to understand quickly. No matter what it is. If the investor is arguing with you about the formula you used in row 18, column six, sheet five to project your revenue in five years, walk away.

Unless you’re raising a growth round (where only numbers matter), don’t take early stage capital from investors who are more focused on the economic model than anything else. They have no idea what they are doing.

If they’re sending you very long and comprehensive request lists to get to a term sheet, walk away.

For the full article and four more red flags, see it as published on Inc.com here.