How to Tell If You’re Talking to a Pretend Startup Investor

How to Tell If You’re Talking to a Pretend Startup Investor

July 13, 2020 by investor

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

In today’s startup world it seems everyone is a startup investor in some form or fashion.

Startup investors call me to discuss deal structures, valuations, or serial entrepreneurs.

I can tell the difference between a serious investor and a pretend startup investor. A pretend startup investor likes the title of investor, but won’t commit the time or money to make it successful.

Here are some telltale signs of a pretend startup investor:

— the investor is not interested enough to visit the team’s HQ or meet with the team.

— the investor asks about the price first, and then figures out the values in the business later, if at all.

— the investor wants reports but doesn’t read them.

— the investor talks about helping the business but never finds a way to contribute.

— the investor glances at the due diligence documents but doesn’t dive deep enough to understand the business.

— there’s no investment thesis or guiding criteria for their investment choices.

— they have no network in the target industry or startup world and can do little to help the startup post-funding.

 

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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Disclaimer:
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.

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