How To Perform Investor Diligence

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Startup founders raising funding should ask as many questions of the investor as the investor asks the founder.

Here are some key points in the founders' diligence on a prospective investor:

Before engaging investors, research them online regarding their portfolio, investment thesis, and investment team.

The more one knows about the investor, the better one can approach and engage them.

Review the investors' online content.

Research the investors’ social media, blogs, and other postings to learn more about their position in the market.

Evaluate the investor's reputation.

Ask other startup founders about the investor and how they work with founders.

Talk with the investor's portfolio companies about their experience.

This may give a somewhat biased viewpoint since the founder received funding.

Assess the investor's operational capabilities and how they can help the startup.

The investor team often indicates what support they can offer the startup.

Understand the investors' values and what they prioritize in a startup.

For example, impact investors will look for a social benefit in addition to a financial return.

Consider these points in diligencing a potential investor for your startup.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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