What to look for in an investor

Choosing the right investor for your company matters as much – or more – than the total capital they’re bringing with them, especially as you will most likely be giving up equity. It’s important to match philosophies and assess the kind of value and expertise the investor will bring to the table. Building contacts and connections with the right people is what will enable your company to grow to the next level.

We conducted a poll asking people in our network what they thought the number one quality in an investor was. We have pulled together four common themes.

1. SOMEONE WHO TRUSTS IN YOUR VISION

Businesses that are raising investment are on a journey that will not always be plain sailing. They want to share that journey with investors who are passionate about what they do, and who share similar values. This is particularly true of impact-focused businesses who are likely to seek investors who buy into their vision, or have a close connection with it.

Seek to understand why a potential investor is interested in your business, beyond your financial projections.

2. HELP AND GUIDANCE

Our research shows that people want depth in their relationship with their investors. They want investors to be able to share knowledge and experience and be able to engage in healthy debate when needed. Sector and technical expertise is also really valuable so that your investor isn’t needing to learn about what you do as a business from scratch, which can take valuable time.

From a practical point of view, ask how much time a potential investor expects to spend in your business. Take references from other businesses they have invested in to find out how they were able to provide help and guidance.

3. A GOOD WORKING RELATIONSHIP

The best investor relationships are built on honesty and transparency and the ability to work together, especially during the tough times in the business. Getting to know a potential investor as well as possible before you make the leap will really help to ensure you are confident you can build a good relationship.

Get to know the team you would be working with before entering an agreement. Do something social – go to the pub, go for a walk. Work out if you think you can work with them over the duration of the investment.

4. ALIGNMENT

All parties need to understand the end goal and the roadmap in place to get there. It’s true the roadmap is highly likely to change over time, but everyone needs to be party to those decisions and buy into the overall journey. This takes time and effort and can involve large pivots where if there are a number of parties involved, everyone needs to work hard to make sure there is alignment.

Take time to regularly check in on where you are on your roadmap, and discuss what changes might need to be made. Take everyone on the journey with you.

If you’re seeking investment and would like to talk to us about how we can help please contact us hello@old.wypartners.com.