In the deal process, there are always issues that give the investor cause to rethink pursuing the investment.
Here is a short list of dealbreakers that indicate it’s time to break off the deal process.
– There are major surprises, such as finding out the company has significant debt they did not disclose previously.
– There are major holes, such as finding out a team member is not signing up to work on the project as previously mentioned.
– There are integrity issues, such as a mismatch between what the founder tells you and what is actually there.
– There is a significant change to the potential of the business, such as finding out the market is not as large as previously considered.
Finally, there’s the inability to come to terms as both sides are too far apart.
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Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.