I have only just joined this site but there are good few posts about investors who offer you zillions of dollars in return for your personal details or something else. So if I could explain how genuine investors really do it from my extensive experience in the markets.
1. It is hard to get investment. An investor will typically have around 100 investment opportunities in front of him at any one time. This can be from not just startups, but the bank, treasury bills, NYSE investments, collective funds, crypocurrency even nowadays.
2. The investor has typically worked hard for his money and whilst he will enjoy tax breaks by investing into a small company, he is risking a lot by investing into a brand new start up in perhaps a brand new market which perhaps doesn't exist yet. Put it another way, if you had a spare $100K would YOU invest into an unknown business?
3. This leads onto if he is interested and likes your idea he WILL DO DUE DILIGENCE. If he doesn't then he's a fool and he won't be asking for your ID anyway. He will meet you (even on Zoom etc in these crazy COVID times). His advisers will meet you, they will ask you awkward horrible questions - and if they don't they aren't doing their jobs properly - and when they do, be prepared and don't feel despondent if you feel like you havent answered properly. (I am occassionally hired as "the Rottweiler" to annihalate even the best business plan but that's not to say we don't still invest, it's just so investors go in with their eyes wide open).
4. He is likely to ask you for links to your website and your Linked in Profile so that he can verify you for initial purposes. He is also likely to ask you for names of your team members and their linked in profiles so he can verify them as well.
5. Personal ID and bank accounts come way, way, way down the line after you have presented, he's asked questions etc.
6. Institutional Investors work for the above investor so there is a further layer of due diligence as they are accountable to the above investor.
7. If your investor is the government, forget everything I have just said :)
Just ignore these people - and I know it's tempting to respond to them, but the repercussions are far, far worse.
Hope that helps.
The simpler thing to remember is that if an "investor" approaches you, they're probably a scammer. Unless you're already a successful, young company, it's always you approaching investors, not the other way around.
Helen, you addressed Paul when you meant me. You are free to operate in your reality, that some do but certainly not all. Annihilating anyone is not the behavior of truly successful individuals. There are plenty of ways to evaluate a business and plan in a manner that sternly addresses the shortcomings and risks, while also seeking to build up. Never too late for you to learn that. Best of luck in your business.
Some good advice in there, however any investor who boasts he/she has 100 investments on their table at any given time I am going to call them out on that line and say, "if you have 100 you need to seriously re-engineer your screening process." That reminds me of a CEO of a billion dollar company who once told me, "I get 25 pitches like yours a day." My response was, "You don't get 25 pitches a day, so quit exaggerating. You may get 25 a month and most of them are not going to be any good." To his credit he brought his president into the loop and said "Review anything he sends from now on." Now whether it was the alpha male dance or this guy just appreciated someone bringing him down to earth from his self-endulged over importance...I had to give him credit for his response. "Annihilating" business plans, is not something anyone should look to do. Life is short and people are working to build livings for themselves. Some are lazy and sloppy, and most definitely those "business plans" should absolutely be sternly evaluated. But there are others who simply do not know the proper approach to writing a business plan. Why "annihilate" someone's attempt at entrepreneurship?! You may have just discouraged someone you could have supported and helped. Perhaps someone with a sick family member...a child with expensive hospital costs....or just someone with a dream who is working to try to make it a reality in a world of BS egos and self-important ego maniacs. We often forget people are people before they build a business. Now if they come back and are rude or do not take suggestion that is a different story...still negative energy and a waste to try to destroy a business plan. All that really illustrates is my first point...if a person has time to waste "annihilating" someone's business plan...then they don't have 100 investments coming their way.
@ Paul M
How naive are you?
Firstly, the 100 opportunities in front of them are not screened, and they also include things like putting it in the bank, buying some FTSE 100/S&P shares, investing into an emerging markets fund, perhaps buying a house to rent out.
You are calling this out - so I will call you out - which CEO was it who suddenly employed you based on your words - and how did you know that 25 were not going to "be any good"? They may have all been legendary - did you see them first?
Why give him credit for his response from his "indulgent over self-importance", because he listened to you? Is that right? So you are the investment Messiah we have been waiting for, for all of these years?
Annihalating business plans is the real world - sorry should investors write cheques for $250,000 of their hard earned cash to people who are looking to build a living for themselves? So, basically you want us to pay your salary and lifestyle? And if you fail - well it's just a failed investment but hey he had a sick family member so we did good.... (I am of course being sarcastic and as tragic as these situations are, an investor has ONE GOAL - to make returns.) if your business plan is strong enough it will withstand the annihalation and we have invested having completely crucified the CEO - it's good to see how they react under pressure as business gets tough - so will you then break down and give up or will you fight?
Remember that your business plan will be in front of professionals who have invested in many, many businesses, and learned from predecessors who have even more experience. These professionals have the brightest brains and they are looking at it from THEIR viewpoint - will this investment make money. That is the ONLY thing they want to see.
Your final point - they don't have 100 investments - trust me, you're very wrong.