Twelve things that great startup investors do

Founders often ask me how to find great investors. In this article, I summarize what great investors do.

1. Great investors invest primarily in founders, not ideas. They know that there are thousands of great ideas, but there are only a few people who can execute them into reality.

2. Great startup investors are not sheep; they make decisions on their own and do not outsource them to others.

3. Great investors communicate with founders as peers and not as bosses.

4. Great investors have their own system for searching and evaluating startups (like a sales funnel).

5. Great investors, in most cases, do not ask founders about the exit strategy, because the investors understand perfectly that no one knows what an early-stage startup will turn into in a few years (if it survives).

6. Great investors do not ask for additional shares in exchange for becoming advisors/mentors. If such investors invest in a startup, then they are already helping the founders.

7. Great investors do not try to squeeze maximum shares out of a startup as they understand that the founders must have an incentive to work in the company.

8. Great investors do not require a detailed business plan and it often takes them 10 minutes to make a decision to invest (or to refuse).

9. Great investors don’t sign NDAs.

10. Great investors respect their time and the time of the founders. They are never late for meetings and do not cancel meetings at the last moment.

11. Great investors will always pay for lunch/coffee with the founders.

12. Great startup investors invest in the future they want, not in the future they fear.

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