Deciding between investors
"which lead investor should I work with?"
A portfolio founder reached out to ask "which lead investor should I work with?" and I wrote him my thoughts. It got me thinking about what is most important and why, and I figured I would share openly here which has been a great way to learn from others.
Here is the email I sent:
What do I need NOW that the lead can solve?
What do I need in 3 years that the lead can solve?
What do you need that you don’t have? (I ask this of founders fundraising, but the inversion is to ask yourself this once you have a choice of investors. Who can fulfill that answer?)
If I had to pick ONE demonstrable value add from FirmX or FirmY what would it be?
which has a higher likelihood to support you during tough times? Who will fund a bridge financing, and how do you know?
Which fund vintage are you going to be a part of? (Matters because if they have a winner in that fund they may not care as much - sad but true)
Have you done 3 backchannel founder references from each firm? (I know the answer - why not dude!)
Which one does your heart say to go with?
What can you learn from each as a BOD member?
How will you know if YourCo is successful? (I know you know) - now ask "is this investor aligned with that vision?"
This is my framework and questions that help influence the decision. It generates a discussion with the founding team, and current investors, to really inform and get at the heart of a decision.