Martin Tobias writing at AlwaysOn: “Good equity investors should be business partners, not just financial investors. Purely financial investors should be the public markets. Unfortunately, as the mood brightens, many of them will come back into the private equity markets. Look for people who have worked in related businesses to yours. An entrepreneur-turned-investor who has raised money and run a P&L statement is a good bet. Ask for references from other companies they have invested in. Call the CEOs. Ask how the board meetings go, what kinds of questions are asked, how the investor manages, their level of engagement, and so on. Google your potential investors. How active are they? Do they contribute to trade publications? If they have a blog, read it. Through this research, if you get the feeling that potential investors are more interested in their golf handicap or mastering an Excel spreadsheet, move on. Life is too short.”
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