What You Should Do After You Sign the Check
An investor does a great deal of work before the investment is made and must also do work afterward.
Here are some key points to consider:
As an investor, you need to maintain contact with the startup.
Make sure there’s control over the compensation of the CEO.
Their compensation is the exit and not the payroll.
Make sure the company has sufficient cash runway.
Losing too much runway can throw the company into a fundraise with ‘fire sale’ terms.
Monitor your list of what must be done from the diligence report to see how the company is progressing.
Keep those items on the top of the CEO list.
Make sure the board remains focused on their duties and sees that they spend their time well.
I’ve found many startup boards become co-complicit with the CEO and fail to maintain accountability for results.
Talk with other investors in the deal and share information as the startup may not keep everyone up to date consistently.
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.
Thank you for joining your host Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.
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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.