Time-poor startup and scaleup founders looking for investment expect potential investors to carry out due diligence on them – but they must conduct their own in return.
David Levine, MD at Glenluna Ltd and principal at Manchester Angels, is a seasoned technology entrepreneur and investor with over 20 years of experience in launching, scaling and exiting businesses.
The founder of Fixtuur – previously DigitalBridge – he helps startup companies to raise money in pre-seed to Series A rounds, and is also an active advisor and mentor for several growing tech companies.
Asked how a founder might judge the right time to raise, he is candid in his response.
“The best time to raise is never,” he tells BusinessCloud. “The second-best time is when you don’t need the money. And the third-best time is when you have evidence of product-market fit and you are putting fuel on the fire.”
He advises: “Due diligence the investor as much as they do you. Speak to founders in the portfolio – and always the ones the investor hasn’t volunteered.
“The investor needs to be a fit from a sector/stage perspective, but you must also be really clear about 1) what type of help you want from your investors; and 2) how realistic that is – and then be clear to that investor about what you need.”
What is the most important factor in becoming investment-ready, in Levine’s view?
“Ensuring you have sized the market in a sensible transparent way from the ground up,” he answers.