Fundraising is important process and all entrepreneurs need help and guidance when the time for raising capital comes. To make the most of every opportunity at this critical point, they need to approach and choose the right investor, who will be able to bring much more on the table than the cash. Money matters but it is not all. Many startups need to become strategic partners with well-connected investors, who are able to help them take their companies to the next level. Choosing an investor is extremely important decision, which can have consequences and can make or break not only your efforts for growth, but the whole company in general.

When choosing an investor, the entrepreneurs should take many things under consideration. They should be able to answer questions like: How much of their company they are willing to give up? What is the pre-money and post-money valuation? How many investment rounds they will need? Does this investor have the right connections and expertise that the company needs right now? Once you know the answer of these questions, you will be more confident in your ability to impress the investors. But before your proceed find out what are the three main qualities entrepreneurs should look for in an investor and you will be more prepared to make well-informed decision the next time an investment opportunity comes your way.

Expertise

Asking questions to the investors will help the entrepreneurs to determine the potential of the relationship. Do not hesitate to ask about previous ventures that the investor has supported and how these ventures were similar to the work you do in your startup. If you want to make a deeper research, you should speak with the owners of the companies that have been backed by the same investor. An investor with the right expertise and experience in the industry that you operate has much more to bring to the table because they know well the challenges and can help the entrepreneurs accelerate their company growth.

Network

In business, if you have the right connections, you may say you have it all. Networks are important, because knowing the right people can open many doors, which otherwise seem impossible to be reached. Investors are often well-connected people with strong social presence, which can help every entrepreneur to get introduced to the right people, who can help their startups by presenting new opportunities and solutions to important problems.

Value

An investor, who shares the same vision as you as an entrepreneur, is a great person to work with. Even though not all investors like to get very engaged in the business and mainly care about the return they will get on their money, there are some angels, who get involved in a business because they share the same passion with the entrepreneur. Just like every other person in your company – the co-founder, the team members and your partners, it is always of a great advantage if the investor is as much aligned with the company vision and mission as everyone else is.

Entrepreneurs, what do you look for in an investor?