Today, we’re talking about how to handle overwhelming investor interest.
Sometimes a small startup goes viral or gets mainstream press and then receives 100s of inbound requests saying something like. “Hi — I want to invest in your company”. If this happens, here’s how you filter down to the right investors for you.
1. Initial filter — reply with the terms you’d want on valuation, the document you’ll use, e.g. a SAFE, and your minimum check size, let’s say $25k. You should also ask them their location or the location of the entity they would invest out of. If they don’t agree or don’t respond in a timely manner, filter them out.
2. Research — Now with a much shorter list, you can look up your potential investors. Find out if they offer help to their portfolio companies? Have they done anything in the past that might be of concern?
3. Meetings — Now we know the remaining potential investors are interested on our terms and we’re interested in them. Don’t expect more than 10% of your initial inbound to make it this far but at least you know these meetings will be worthwhile.