While you are looking to raise capital for your company, you should check out the investor just as much as the investor is checking out you.

 

You could approach this in the same way that your salespeople might do when they are out on a sales call.  During that time they will qualify the customer.  Consider doing the same to qualify an investor. 

 

Here are four key areas of questioning that I learned from my sales coach, Dan Kreutzer at the Samurai Business Group of Chicago, when I went through their Black Belts sales program.  These questions were part of my sales call plan.  A call on an investor can have a call plan as well.

 

1. Discovery
   1. What interested them in meeting with you?
   2. What about the industry do they like?
   3. How do they operate with companies they invest in?
   4. What is the typical structure of their investments?
2. Commitment
   1. Are they active in making new investments right now?
   2. How many new investments do they make in a year?
   3. What stage is their fund at?
   4. How much is set aside for follow-on investments?
   5. Are they raising a new fund at this time?
3. Decision Making
   1. What is the decision making process for deciding on an investment?
   2. What is their criteria for deciding on investments?
   3. Who is part of the decision making process?
   4. What is the typical timing?
4. Financial
   1. What financial return are they looking for on a targeted investment?
   2. What typical size of an investment do they make?
   3. Do they syndicate part of the investment to another firm?
   4. What is their history for follow-on investments?

These are just some sample questions.  I like to keep the list to less than one page.  The questions can vary on the circumstances.  These would be very different for an angel rather than an institutional investor.

 

If you can feel satisfied that you know the investor in each of these four areas and still feel there is a fit, you are a lot farther along towards finding the right investor and having a good relationship.