How to select your investors

Brian Garrett, co-founder of CrossCut Ventures (http://www.crosscutventures.com) discusses choosing investors. This video will help you select the right investors for your business, who will be aligned with your mission and help you grow.

  1. Look for individuals who are in sync with your vision
  2. Consider how their network can benefit you
  3. Seek investors who are aligned with your goals
  • Look for compatible personalities

The idea of going out to raise money should always be less about the capital and more about the – the – the relationship you’re building with the investor base and the type of partnership you want to have with them as you think about starting a company and taking it to market. You’re, in essence, going to war with these individuals and you want to have alignment.

So the three things that I think are most important for an entrepreneur to assess when they’re thinking about their capital partners is one – do they understand your marketing strategy? Do they have any domain expertise within that market concept that you’re pursuing that allows them to understand and – and identify the uniqueness in your vision?

Two, do they have any experience or relationships that can help? So do they have a roll of decks that’s relevant to the business opportunity that you’re trying to – to develop and take to market?

And then three, and most important in my opinion is, are they aligned with your vision for – for the strategy and outcome for the company? Do they come with a philosophy of only a billion dollar outcome or we’re not interested whereas you would love to be acquired in 50 to $100 million range? If that’s the case, there’s a misalignment there. And so it’s very important to make sure that they’re supportive and trusting of you and the strategy that you want to employ for executing the business.

And at the end of the day, it’s really about, do you get along with them personally? Are they people you enjoy spending time with and we always comment, you know, do I want to sit down and have a beer with this guy or is there something grating about his personality?

And it goes both ways. And the truth is life is just too short not to work with great people that you, you know, feel aligned with in your vision, not only for business but for life and the goals you achieve. So, you know, we – we often joke that most venture relationships last longer than marriages so you’ll have to select wisely.