VC Minute – quick advice to help startup founders fundraise better.
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Questions that I would ask VC investors would really hone in on the areas in which they can add value. That’s what they’re always saying, so let them prove it to you.
What I would look for here is industry knowledge. How can you help me get smarter about the industry? You want an investor who is just as excited about the industry that you play in as you are.
You want investors who are going to make introductions to different strategic players in this space. We have an investor who was able to make introductions for us to various employee benefits partners, and that was something that was really valuable to us.
Make sure you put together a list—not in your head, but literally write it out—of what you are looking for in an investor. As an example, we are a women’s health company, and we wanted to have more people on our cap table who literally had ovaries. That was something that was really important to us.
As players in the media space, we also wanted subject matter experts who really knew the media space and could help us see around corners. And by the way, I hate myself for saying that because VCs say that all the time. But yeah, they could help us see around corners. And that was super critical for us to be partnering with investors who had already been there, done that, and could see us about to make mistakes that they had already made.
We play a little bit in pharmacy, so I really wanted somebody who knew the pharmacy space as well. And we ended up getting folks in the pharmacy space. Same within the media space. And then lastly, we wanted a set of founder angels who had exited their businesses.
So make sure you have criteria for what you’re looking for in an investor. And as you’re asking investors these questions, make sure that their answers align with what you’re looking for.
Again, this is based on cultural fit. Your life can either be really fun or really boring. It’s already hard enough; you want an investor who’s really on your team.
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