22 questions founders can ask investors

3 red flags that are killing your fundraise according to a $100M VC fund. Warning signs that Juan Carlos Pacheco and IDEA Fund Partners screen for in the first conversation: • Arrogance (kills partnership) • Weak command of numbers (signals chaos) • Saying "no competition" (shows market naivety) Here’s how to avoid them to start showing up as a credible, coachable operator that investors actually want to partner with. #1 Arrogance Juan Carlos said it plainly: "If you're a jerk, that's a very quick red flag. Because it's a partnership when you invest." This isn't about being nice for the sake of being nice. It's about what arrogance signals. If you dismiss questions, you'll dismiss your customers If you can't take feedback in a pitch, you won't take it from your board. .  If you think you know everything, you won't adapt when the market shifts. Investors are buying into years of partnership. Board meetings. Hard conversations. Pivots. Bad quarters. If you're arrogant now, you'll be impossible later. #2 Weak command of your numbers Juan Carlos said: "If you can't speak with some intelligence about revenue, burn rate, how you're gonna use the capital... that's a huge red flag." Weak grasp of numbers signal operational chaos. Vague on how you'll use capital? ↳ You'll waste it. Don't know your burn rate? ↳ You're guessing at runway. Can't explain how you arrived at your valuation? ↳ You don't understand your business model. Investors aren't expecting perfect projections. They know things will change. But they need to know you're running your business with discipline. That you're making data-driven decisions. That you can be trusted with their capital. If you're fuzzy on the numbers now, you'll be reckless with their money later. #3 "We have no competition" This one kills more deals than founders realize. Juan Carlos said: "Competition is typically a good thing. It shows there's a market there." Here's what "no competition" actually tells an investor: Either you haven't done your homework, or there's no market and customers don't care enough to pay. And if there *is* competition and you just don't see it? You're naive. You're not paying attention. You don't understand your landscape. Juan Carlos used a sports analogy: "If you're going into a tournament, you scout your opponents. You see what they're strong at. You see what you're strong at. And you adapt." Competitors aren't threats. They're validation. They prove there's a market. They show you what works and what doesn't. They force you to get sharper. If you can't articulate your competition and your edge, you're not ready. At the early-stage, there is uncertainty and risk.  Investors don’t expect flawlessness. They do expect coachability, self-awareness, and market intelligence. Know your numbers cold, stay humble, and study your competition. Do that, and you’re already ahead of most pitches.

Investors bring more than money, they bring an agenda, a timeline, and expectations shaped by their own stakeholders. Founders who understand this dynamic gain an edge in choosing the right kind of capital and setting the tone for the relationship.   Investors can be separated into different groups including angel investors, venture capital firms, and family offices. Each has a different incentive model that shapes their behavior after they invest.   • Angel Investors typically invest their own money, often driven by relationships or belief in a founder. Their incentives are usually more flexible, they’re often more patient, emotionally invested, and founder-friendly. Their capital can be great for early validation and advice.   • VC Firms manage money on behalf of Limited Partners (LPs). That means they’re not just betting on you but they’re accountable to others. Their goal is to deliver a return across their entire portfolio, not necessarily from every company   • Family Offices usually play the long game. They might be motivated by diversification, market positioning, or learning opportunities. For example, an investor might want access to your technology or insight into your customer base and not just financial return. That’s not necessarily bad, it just changes how you evaluate success together.   When you understand their incentive model, you can tailor your communication and expectations. For instance, if a fund needs big exits to return capital to LPs, frame your growth story in terms of market dominance and scale potential. If a family office values stable, long-term returns, emphasize defensibility and sustainable unit economics.   Ultimately, investor alignment isn’t all about whether they like your pitch, but it’s also about whether your business model fits their fund’s internal logic. The most successful founders don’t just take money; they choose it strategically from investors whose timelines, pressures, and incentives are compatible with how they plan to build their company.   Learn more: https://lnkd.in/gsvQySnq   #HarmoniousFundAdmin #Founders #Fundraising #HarmoniousFounders

𝙃𝙖𝙫𝙚 𝙮𝙤𝙪 𝙝𝙚𝙖𝙧𝙙 𝙤𝙛 𝙁𝙤𝙪𝙣𝙙𝙚𝙧/𝙁𝙪𝙣𝙙𝙚𝙧 𝙁𝙞𝙩? 👇🏽 I spent the weekend reflecting on my own experience, first working with investors as a founder and now engaging with founders as an investor. Hopefully, these thoughts will help you do due diligence on your potential investors. Choosing investors is as important as choosing your co-founders. In the early stages, you’ll be spending a lot of time with them, so you need an ally. Founder–funder disputes are common, but divorce is painful in startups. Never prioritise money; always aim for partnership, conviction, and alignment. Here’s a framework I follow when we invest: 𝙄𝙣𝙫𝙚𝙨𝙩𝙢𝙚𝙣𝙩 𝙋𝙝𝙞𝙡𝙤𝙨𝙤𝙥𝙝𝙮 Understand how the investor defines success and where your company fits within their strategy. This shows whether they’re patient capital or chasing quick returns, and how much conviction they’ll have when things get tough. It’s about seeing if your long-term view aligns with theirs. 𝘿𝙚𝙘𝙞𝙨𝙞𝙤𝙣-𝙈𝙖𝙠𝙞𝙣𝙜 𝙖𝙣𝙙 𝙋𝙧𝙤𝙘𝙚𝙨𝙨 You need clarity on how decisions are made, by whom, and how fast. Some funds have deep investment committees, others move on instinct. Knowing this helps you plan your fundraising timeline and avoid surprises. 𝙋𝙤𝙨𝙩-𝙄𝙣𝙫𝙚𝙨𝙩𝙢𝙚𝙣𝙩 𝙄𝙣𝙫𝙤𝙡𝙫𝙚𝙢𝙚𝙣𝙩 Money is easy; partnership isn’t. You need to know whether they’ll be active mentors, passive supporters, or micromanagers. Their level of involvement should match what you actually want, not what they assume you need. 𝙁𝙤𝙪𝙣𝙙𝙚𝙧 𝙍𝙚𝙡𝙖𝙩𝙞𝙤𝙣𝙨𝙝𝙞𝙥𝙨 How investors behave during hard times matters more than when things go well. Ask questions that reveal how they handle conflict, underperformance, or pivots. It shows whether they treat founders as partners or portfolio assets. 𝘾𝙖𝙥𝙞𝙩𝙖𝙡 𝙖𝙣𝙙 𝙎𝙞𝙜𝙣𝙖𝙡𝙡𝙞𝙣𝙜 Follow-on strategy and signalling risk can make or break future rounds. Understand how much they can or will support you if things go sideways or skyrocket, and how they behave when they choose not to reinvest. 𝘼𝙡𝙞𝙜𝙣𝙢𝙚𝙣𝙩 𝙖𝙣𝙙 𝙑𝙞𝙨𝙞𝙤𝙣 You’re not looking for validation; you’re checking whether they truly understand what you’re building and why it matters. Alignment ensures they’ll have conviction through market cycles and won’t push you towards short-term outcomes. 𝙏𝙧𝙖𝙣𝙨𝙥𝙖𝙧𝙚𝙣𝙘𝙮 𝙖𝙣𝙙 𝘾𝙪𝙡𝙩𝙪𝙧𝙚 Strong relationships rely on clear communication. Learn their preferred style, whether structured updates or informal check-ins, and how they react to bad news. Set expectations early for honesty on both sides. 𝙍𝙚𝙥𝙪𝙩𝙖𝙩𝙞𝙤𝙣 𝙖𝙣𝙙 𝙁𝙞𝙩 Every investor has a reputation among founders and other VCs. Do your backchannel checks. How they handle board tension, layoffs, or exits reveals their true character. You’re assessing fit as much as credibility. I hope this is helpful. If you have any questions or clarifications, comment below. #gew #investors #founders

Some great advice. As an angel you know that most of your investments will fail with randomness probably the biggest explainer. If you can't accept this you probably should not invest or only write small cheques. For an investee company, investor relationships are important. If one of my investments doesn't communicate I just write them off mentally and move on. A company that spends time creating a bond keeps me engaged and if they reach out for help I'm more than happy to help. I guess that is just standard human behavior

Managing angel relationships once the money’s in? That’s where I went wrong as a founder.  👇 Here’s what I’ve learned about keeping investor relationships healthy 𝐚𝐟𝐭𝐞𝐫 the round closes. 4️⃣ 𝐊𝐧𝐨𝐰 𝐲𝐨𝐮𝐫 𝐩𝐥𝐚𝐜𝐞 𝐢𝐧 𝐭𝐡𝐞𝐢𝐫 𝐩𝐨𝐫𝐭𝐟𝐨𝐥𝐢𝐨 An angel’s risk profile improves once they reach 20+ deals — they expect a mix of wins and losses. Working with a syndicate or several angel groups can balance enthusiasm with experience, and keep admin time and costs manageable. I value angels who're transparent about their risk mitigation: “𝘯𝘰 𝘧𝘰𝘭𝘭𝘰𝘸-𝘰𝘯𝘴, 10 𝘥𝘦𝘢𝘭𝘴 𝘢 𝘺𝘦𝘢𝘳, 𝘢𝘭𝘭 𝘚𝘌𝘐𝘚.” That clarity makes life easier. ⚠️ Beware of being too many people’s first deal. New angels bring enthusiasm and time, but often unrealistic expectations and over-involvement. They may not yet have learned what “𝘋𝘰𝘯’𝘵 𝘪𝘯𝘷𝘦𝘴𝘵 𝘶𝘯𝘭𝘦𝘴𝘴 𝘺𝘰𝘶’𝘳𝘦 𝘱𝘳𝘦𝘱𝘢𝘳𝘦𝘥 𝘵𝘰 𝘭𝘰𝘴𝘦 𝘢𝘭𝘭 𝘵𝘩𝘦 𝘮𝘰𝘯𝘦𝘺 𝘺𝘰𝘶 𝘪𝘯𝘷𝘦𝘴𝘵” really means, so over-react to routine bad news. 5️⃣ 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐞 𝐜𝐨𝐧𝐬𝐢𝐬𝐭𝐞𝐧𝐭𝐥𝐲 𝐚𝐧𝐝 𝐩𝐫𝐨𝐚𝐜𝐭𝐢𝐯𝐞𝐥𝐲 I was terrible at this in my first angel-backed startup. It filled me with dread. Now I see investor updates differently. They’re not (𝘫𝘶𝘴𝘵?) a test to pass or fail — they’re an opportunity to create and maintain a professional relationship. Angels want to know: • How their all investments are performing • Where and when to focus attention • That you’re still delivering on what you promised You’re likely one of 20+ startups in their portfolio, so make their life easy. A simple, consistent update template (cash runway, MRR, headcount) goes a long way. It reduces surprises, builds trust, and lets you 𝐬𝐭𝐚𝐧𝐝 𝐨𝐮𝐭 for the right reasons. Be honest about challenges. Life is easier when you’re in their “good performer��� category — but you won’t stay there if you hide bad news or over-promise and under-deliver. Don’t spring big pivots on investors unannounced. This can impact EIS tax relief eligibility, which is terrible news. Be confident asking for specific help and in saying “𝘯𝘰, 𝘯𝘰𝘵 𝘯𝘰𝘸” when something’s a distraction. 💡 A tip for angels: 𝐟𝐨𝐮𝐧𝐝𝐞𝐫𝐬 𝐠𝐨 𝐬𝐢𝐥𝐞𝐧𝐭 𝐟𝐨𝐫 𝐚 𝐫𝐞𝐚𝐬𝐨𝐧 Most of us hit a point where we’ve run out of good news and good will. They may feel pressure to tell you what you 𝘸𝘢𝘯𝘵 𝘵𝘰 𝘩𝘦𝘢𝘳, not what you 𝘯𝘦𝘦𝘥 𝘵𝘰 𝘬𝘯𝘰𝘸. Some go silent, others depart far from reality. Encourage regular updates and respond in a 𝐧𝐨𝐧-𝐣𝐮𝐝𝐠𝐞𝐦𝐞𝐧𝐭𝐚𝐥 way. Give permission to share bad news. Occasional offers of specific 𝘱𝘳𝘢𝘤𝘵𝘪𝘤𝘢𝘭 help can remind them you’re still on their team. 💡 𝐒𝐭𝐨𝐩 𝐩𝐢𝐭𝐜𝐡𝐢𝐧𝐠. 𝐒𝐭𝐚𝐫𝐭 𝐜𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐧𝐠. The real work starts 𝐚𝐟𝐭𝐞𝐫 the round closes — when you’re building a business, not selling a vision. Founders: are your updates admin, exams or relationship building? Angels: how do the best startups keep you informed and focused post-investment?

The painful truth about your first angel investments Your first 10-20 investments are the hardest, and that's probably because you're bad at picking companies since you don't know what good looks like. You can't tell the difference between a founder who's actually crushing it versus one who is good at pitching. You haven't seen enough cap tables to know if those terms are founder-friendly or investor-friendly. Even if you could spot the great deals, you probably wouldn't get into them. The best deals already have plenty of money chasing them. This creates a brutal cycle where you need portfolio companies to build credibility, but you need credibility to get into good deals. Let’s talk about it. Shadow investing: the strategy nobody uses Before you write your first check, start building your investing muscles. Let’s take Y Combinator. Go through every company at demo day, decide which ones you'd invest in, and write it down. You can do this with all of the accelerator programs. Now…check back in 2-3 years. That "obviously stupid" idea? It's now a unicorn. That "sure thing"? Dead. An investor in my circle did this for 5-7 years before writing a check. By the time he had capital, he had pattern recognition most angels spend $200k learning. You can also sign up for syndicates on AngelList to see a lot of deals. You’ll start to get a lot of repetitions on what good looks like simply by seeing a lot. What to expect in your first 20 Here's some tough love on what to expect from your first few checks. (Sorry in advance): Your deal flow will be terrible. You'll likely hear about companies after the allocation is gone. Your value proposition will be weak. Founders will take your money but won't really want your advice. Your pattern recognition will be nonexistent. You'll invest based on vibes and incomplete frameworks. This is normal. Start with small checks Fight the urge to write "impressive" checks. Don't write a $25k check on your first investment just to feel serious. That's ego, not strategy. Instead, write $1k-$2k checks through syndicates. Do 20 of those first. Twenty $1k investments teach you more than one $20k investment. Founders always value the helpful $1k investor over the silent $25k one. The magic after investment 20 After 20-30 investments, the flywheel starts spinning. Portfolio founders introduce you to their friends who are raising You start seeing deals far earlier Your pattern recognition sharpens Your portfolio will start referring to each other, and your value as a connector compounds automatically. This is the compounding most angels never talk about. It's network effects, knowledge accumulation, and reputation building all at once. The Bottom Line Sign up for syndicates on AngelList and other platforms to see deal flow. Those angels with 240+ investments and 10 unicorns all sucked at the beginning too. The difference is they kept going. What's stopping you from starting today?

Met a fund manager last week at an event, and after learning about what I do for a living, he asked me what my “end goal” was. Was I building for an eventual exit - to be acquired, or to IPO? It’s quite a common question! I’ve always found this question hard to answer - initially because when Syncio was a startup, the answer I came up with would always be of something tantalisingly big-impact and ambitious and not really about an exit. Something like, “Syncio will become the biggest x in the world”. Whilst I still have ambition on that, I rarely give that answer anymore because it's somewhat disingenuous. Almost like you’re above the financial outcome. A lot of people asking are friends and family, who are generally outside of the ‘startup sphere’, and thus the answer they generally understand is more at a pragmatic-level.  But at the same time, the financial outcome answer falls short. Like of course some sort of exit would be a huge outcome. But this answer feels like the end of the journey, and that makes me feel sad?   So back to the fund manager, I answered with, “I’m just focused on building - I feel that we’re just at the beginning - I’m enjoying building too much to even consider stopping. Work is fulfilling and purposeful, and it’s also sustaining my family and personal life - life is good!” I used to think that this type of answer was a bit of a cop-out because it felt like a deflection. But the question itself corners me into answering a question that’s not hugely important to me, at least not at the present. The fund manager then said that this was a great indicator of success, because most founders that he speaks to are chasing that theoretical exit, or have some predetermined timeline they need to rush to. The problem with that, he said, was that inevitably, he found that these founders burned out, or were left dissatisfied, even if it led to a successful exit. Getting to ‘default-happy’ with what you’re working on and which enhances your life outside of work, is sustainable, and in turn enhances your chances of success, no matter the timeframe. And then it hit me that this was the business that I had designed for myself, and that building it sustainably with each step of the way while increasing exit optionality, was the path for me. Designing the business around my family and health, but in a way that doesn't compromise but rather compliments the business, was a feature I brought to life. Of course, every founder has their own path, obligations, and goals. And that’s cool. Some have a fiduciary responsibility to get a financial outcome to investors - which I have too, and which I take super seriously. But the way I’m going about building the business is possibly atypical, and I had to figure that out for myself. As founders, we’re always chasing the destination. It’s also important to appreciate the journey. And sometimes, the journey itself is enough.

“How Many Startups Should You Back (and at What Check Size)?” This is one of the first questions new angel investors ask and one of the hardest to answer neatly. Because unlike public markets, angel investing doesn’t play by averages. You’re not building a balanced portfolio. You’re building a set of asymmetric bets, where a small number of winners often carry the rest. The challenge is that nobody knows which ones those will be. At Seraf, we often tell new angels that diversification matters more than precision. Most data suggests you need at least 20–25 companies in your portfolio before your returns start reflecting “the power law” — where one or two big outcomes offset the others that go sideways or to zero. That doesn’t mean you have to write 25 large checks. It means you have to design your portfolio with enough surface area for luck and skill to work together. A good starting framework looks something like this: If your total angel allocation is $250K, you might plan for 20–25 checks of $10–12K each. Then, if a few start showing real traction, reserve additional capital for follow-ons. Most first-time angels make two mistakes: they invest too much, too soon, in too few companies. It feels exciting at the start, but by deal #5, they’ve already tied up most of their capital. When those early picks don’t pan out, there’s no dry powder left for the outliers. Angel investing isn’t about betting bigger. It’s about betting often enough and staying disciplined long enough for the math to work in your favor. The other piece of advice I share often: check size should reflect your conviction and your portfolio design. If you’re just getting started, smaller checks let you learn faster and build pattern recognition without concentrated risk. Over time, as you understand what kind of founders, models, and markets fit your lens, your check sizes can grow with your conviction. There’s no magic number. But there is a mindset: Start broad. Stay patient. Keep reserves for the ones that truly earn it. For angels in the room — how did you decide your own target portfolio size? #AngelInvesting #VentureCapital #Seraf #Investing #Operators

The best investors aren’t sitting on boards. They’re sitting on battle scars. A few years ago, I used to think raising from a big VC was the goal. Big name. Big logo. Big validation. Now I see it differently. The best investors I’ve worked with aren’t in the biggest funds. They’re the ones who’ve actually built. They’ve hired badly, shipped late, sold early, burned cash, fixed it and somehow built again. They know what it feels like to run out of time, money, or belief because they’ve been there. And that shows up in how they back founders. Less theory. More empathy. Less “update decks.” More “let’s fix this together.” Operator-led funds, solo GPs, micro funds. They’re building real momentum for a reason. They move faster. They stay closer. They care more. And because the landscape is shifting, relationships are becoming the real differentiator. Money is money. But access, trust, and credibility come from the relationships you build before you need them. The founder who builds genuine relationships early will raise faster and smarter than the one who builds a perfect deck late. If you’re fundraising right now, remember: You’re not just choosing investors. You’re choosing operators who get it, and people you’ll be texting at 11pm when it’s all on fire. Founders or VCs agree.