Video by sammrchant

You would be absolutely insane not to ask investors these three questions before you take their money. First question you should ask the investor is when did they last write a check? This is important because investment funds go through cycles, whether they're deploying or fundraising, and you as a founder rarely know which cycle they're in. Knowing when they last

made an investment is really important for your timelines when it comes to managing your fundraise. The second red flag question is do you have follow-on capital and capacity? This isn't a deal breaker but for some investors who don't have the ability to write follow-on checks they should be replacing their inability to write capital checks into the company with good introductions to

downstream investors. If they don't have this some of them are going to be a dead weight on your cap table. Question number three is an absolute non-negotiable for any founder. You should ask your investor to make three introductions to portfolio founders for you to do your own DD on that investor. I promise you you should never skip this step. The founders will tell you everything

you need to know about the reality of taking money from this investor. So before you accept any cash from an investor, these three questions are a must.