Getting to know investors

November 13, 2020

by a searcher from École Centrale Paris in Paris, France

Hello searchers!

With my partner, we're currently fundraising a traditional SF, and I would love to hear from you : What are the questions you like most to ask potential investors to get to know them better ?

Questions like: "why do you invest in SFs?"; "how much time are you able to dedicate?"; "what are the deals you liked most?; etc

Thanks everyone !
Kind regards,
Stéfano

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Reply by an investor
from University of Commerce Luigi Bocconi in London, UK

I would definitely always ask the investor for searcher references in the SF/ETA space (unless they are new), and of those references i would then weigh highest the feedback/reference given to you by a searcher who is > 1-2 yrs post acquisition. In my experience, the feedback from searchers earlier in the process is substantially less valuable as it tends to be less representative. (Of course such feedback is still better than no feedback).

keep in mind, this is your SF/ETA/business, and you are the largest stakeholder of it, so - of course - investors have the right to vet you, but equally you should vet every one of your investors respectively. You are going into a 5,10 or 15 year partnership here, so this is not to be underestimated. Especially in times where capital is becoming more and more abundant...

hope this experience share helps.

Reply by an intermediary
from Rice University in Houston, TX, USA

Great topic Stefano. I wanted to put this on your radar - we are hosting a town hall on how entrepreneurs and businesses can take on (minority) growth capital from PE without sacrificing control of their business or come under threat of dilution. When your search materializes and you takeover a business that might want to take on additional capital, this is a very important and dynamic topic to consider. I would love for you (and the rest of the SF community) to join us next Wednesday (11/13) - https://zoom.us/webinar/register/###-###-#### /WN_Pzzm6ExTQRWXD6wZFE-_lg

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