Entrepreneurship · Fundraising

What is the best way to perform due diligence on startup investors?

Manoj Sahoo Lean Six Sigma Black Belt Project Manager at Freelancing (Self Employed)

October 31st, 2016

I plan to start a company and I am reading about all the things that need attention. Seems that performing due diligence on startup investors is one of the most important things to do when securing the finances. How should this be performed? Can I do this on my own or do I need to hire some additional help? I want to pay special attention to this and leave nothing to chance. I would appreciate all advice I can have.

Christian Haller Visionary Entrepreneur and Investor

October 31st, 2016

Best case is to consult your network and the network has direct knowledge. Also, review prior investments of any investor, and talk to those companies.

Philip Miller Founder at Hempies™ Paper Inc.

October 31st, 2016

Read "Winning Through Intimidation" by Robert J. Ringer. Especially the part about the Three Type Theory!!!
a. There are only three types of people in the business world
i. Type 1: Lets you know that he’s out to get all of your chips. Then he tries to do just that.
ii. Type 2: Assures you that he’s not interested in getting your chips. Then he tries to grab all of your chips anyway.
iii. Type 3: Assures you that he’s not interested in getting your chips, and honestly means it. However, in the end, he tries to grab all of your chips anyway.
b. In business, no one ever does anything for anybody else without expecting to gain something in return.

I have 25 years in successful business and human nature supersedes all "rules" of business, even in this new age, so always be prepared and given the choice always go for type "1".  They are the best investors of all because you know what you are dealing with.