An investor is not just money. Or what is smart money.

An investor is not just a source of money for which the founder will develop his project. This is the partner that the founder will have to work with over the next few years. Therefore, the choice of this partner should be approached very carefully, and not to miss the first investment that you have been given.

So, you are determined to attract investment. First, let's repeat that you need to prepare for this:

1. A package of documents, which consists of
   1. Financial model
   2. Investment presentation
   3. Road map (road map, it's a plan of action)
   4. Understanding what this money will be spent on
   5. Unshakable self-confidence
   6. Good team
   7. Understanding the exit strategy for an investor

This set is enough for you to competently communicate with the majority of business angels and investment funds. To do this, it is first of all necessary to take care of the public coverage of your project. Publish the vision and description of the project on public portals such as Zvorykinsky Project, Innovation Space, RusBase, CrunchBase and StartupPoint. If there is an opportunity to receive several publications in the media, then it is also worth doing it. And you need to do all these things in advance, so that the person who started looking for information about your project saw that the project was not just invented and that it has a history. So, for example, in the "Innovation Space" you can get a response to your project, which will be an additional bonus for investors.

But this article is not about how to attract investment, it is about how to choose the right investor, which will really be useful for the project.

Imagine the situation that the project is really good and you have a great team. In this case, investment proposals will fall on you like snow on your head. This is true, therefore at once etch out of mind the mindset of the petitioner. If your project is really a profitable investment, then the money will not keep you waiting. After all, an investor is no less interested in making money. And invest in a project like yours, which will grow tens of times over the next couple of years and provide hundreds of percent of profits - this is an excellent opportunity to buy a house in Hawaii.

So, you have half a dozen offers for investments from a variety of investors. On what factors do you base your decision on?

1) Size of the fund

A good investment fund has a strategy. Because in general any company that is going to earn has a strategy of how it will do it. In this strategy, it is usually written what size of investment the fund will make, in which markets, etc. You are interested in all the factors of the fund's strategy.

First, the size of the investment. There are investors who invest in projects only from one million dollars. There are those who begin the conversation only when you ask ten million. And there are small ones that can give you an amount of two hundred or three hundred thousand dollars. First of all, these figures are due to the size of the fund itself and, accordingly, the profits it must provide. Because the management resources of the investment fund are also limited and it is much easier and more reliable for them to manage a portfolio of twenty projects of ten million each than two hundreds of one million. In addition, if the project asks for a little money, it means that it is not going to grow so large that the proceeds from investments really aroused the appetite of the people who invested in the fund (yes, the funds also have their investors).

2) Profile

The second element of the strategy, as we already mentioned above, are the markets on which the fund operates. For starters, markets are geographic. Because you can have serious disagreements with the investor if you expect to sell your machines to China, and he expects when you start deliveries to North America. However, these differences are solvable if you can clearly explain to the investor that by deliveries to China you will earn more money for him.

A much more important factor for you, and in general, the most important factor in choosing an investor, is the industry market on which it operates. Because all over-the-top start-ups are made with unfair advantages, the unfair advantages that the founders of the project have. Most often these advantages are found and earned by the founders themselves. And a strong industry investor who has everything on the market is one of the types of such advantages. Imagine that you are making technology for sewage treatment plants, and your investor is already launching its second fund in the green technology market. He can just a few calls to ensure you meet with many manufacturers who can become your customers. And you can be sure that he will do it, because he is interested in the success of the project no less than yours after you have invested your money in it.

Therefore, when you are considering an investment proposal, even if it is very sweet, first think of what unfair advantages this investor will bring to the project. Without them, you can simply eat all the money and do nothing, but just one contact that investors can provide the project with success and prosperity.

3) Experience

In addition to profile, the investment experience of the investor is also important. Because investment is no less complex, and where even a heavier thing than entrepreneurship. An experienced investor has seen more than one project like yours and he knows exactly how they looked at the beginning and what they did in order to achieve success. At the same time, as a person who has never dealt with investments before, can panic if something goes wrong, demand from you quick decisions and ruin the project. An investor, this is another partner of your business, so ensure that you will communicate with him for a long time and often. Even banal personal sympathy plays a role here.

4) Company valuation

The simplest factor is among others, because it can be expressed in numbers. Which part of the project does the investor require for his money? In addition to the banal profitability or disadvantage of the proposal, you can extract from these proposals information on how promising your project is perceived by some prospective investor. Perhaps it is worthwhile to understand why this is so and how this will affect the further work.

5) Strategy of work with the founders

The relationship of the founders and investors is not a topic for one psychological novel. And about many things it is worth negotiating "on the shore" and fixing them with the appropriate documents. For example, to what extent can the investor interfere with the operational work of the company? Can he limit the adoption of strategic decisions by the founders? How much for you personally is acceptable that, or other, the degree of interference in the affairs of the company on the part of the investor is up to you.