Respect the Funding Process: 5 Don’ts of Raising Early Stage Startup Capital

4. Don’t fail to do your due diligence on an investor prior to meeting them.

Underscoring my previous points, you’ll need to do enough research to know what space and company stages the investor has experience with and what specific companies the investor has funded (keeping an eye out for your competitors).

Look out for investor activity: has the investor recently made any investments? You also want to know the person behind the investment: who are they?

If you can speak with other entrepreneurs they have backed, that can be a helpful way to learn more about investors personally and figure out if they are someone you can work with. You need to know this ahead of time — or you are just wasting your time and theirs.

5. Don’t wing an investor meeting.

If you’re meeting with an investor, it’s never just a casual chat. You are there to pitch. Have your pitch deck ready and be prepared to present it. Be ready to answer questions — and if you can’t answer a question on the spot, make sure you follow-up.

If you can steer clear of these five “don’ts,” you’ll demonstrate to potential investors an understanding of, and a respect for, the funding process. Observe the protocol and you and your company will be in good position to earn reciprocal respect from potential investors.

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Photo: David Ehrenberg

David Ehrenberg is the Founder and CEO of Early Growth Financial Services. David works with companies at every stage in the development process, and has expertise in building high growth companies, venture funding, debt financings, mergers and acquisitions as well as strategic planning and operational expertise in accounting, human resources, legal and corporate governance, faciltiies, IT and administrative functions.