At the UCF Business Incubator, we often work with entrepreneurs considering or actively raising investment capital to scale their businesses. In my career, I have raised capital for my businesses and been on the other side as an early-stage investor. When I work with entrepreneurs raising capital most of their focus is on the financial terms: Convertible note, SAFE, or equity; valuation, caps, dollars needed, use of funds, etc. All are obviously critical and hopefully set the stage for providing the company with the fuel it needs to grow while allowing both the entrepreneur and the investor a significant opportunity for financial gain in the future. However, there are other factors at play beyond the financial terms that an entrepreneur needs to consider as it assesses potential investors. As I remind entrepreneurs when they bring on external capital, they are not only acquiring capital, but new business partners with expectations and, if selling a majority interest in the company, a new boss.
Too often, these other criteria get short shrift in the capital raising process, so let’s discuss a few that you should consider when thinking about their ideal partner:
