How to choose your startup investors

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2023-01-27 21:00:06

I’ve been lucky enough to raise $50M from great angels and VCs for my company Liblab. During this journey (and previous companies I started) I’ve learned what to do and who to avoid when raising capital for your startup. This is my attempt to give some tips for future founders.

There are many articles for investors on how to choose founders to invest in, but investing in a startup is a two-way street. Investors try to choose the right founders, and founders need to be careful about which investors they choose. Investor-founder conflicts are more common than you think and can be a significant reason for startup failures.

Choosing investors is a big decision and usually a one-way door. Once you have an investor in your cap table, they will stay there for a long time, probably even after you as a founder.

I am aware that sometimes beggars can’t be choosers and if you must have an investment to survive, this article may not be useful. But in most cases, you will have the option to decide between different investors in each round.