Startup Investor Fit Research Checklist

An article we liked from Thought Leader Saba Karim:

Startup-Investor Fit

The definitive index to identify investor-fit for your startup. An 18-point checklist, with three sections to help you find SIF.

You’ve all heard of Product-Market fit (PMF), but I bet you haven’t heard of Startup-Investor Fit. Because, it didn’t really exist… until now. Startup-Investor Fit (SIF) is the degree to which there is a fit between your startup and an investor - who you are seeking funding from.

Use this checklist for when you are researching funds to invest in your startups. There are an abundance of investors out there - so the goal isn't to reach out to all of them, but to find the one that suits you the most.

This checklist can also be used when you’re taking a meeting - get on a call and go down the list. See if you are a fit for them, as much as you consider if they have what you need as well.

Overview

CRITICAL are the must-haves. Without these things in line, don’t even bother reaching out or trying to convince them to invest. It just isn’t going to happen. If this was dating, imagine this being things you look for most in a potential partner: are they your preferred gender, are they in the age bracket you typically like, are you attracted to them, do you like similar things? And most importantly, do you have chemistry?
ADDITIONAL are the good-to-haves. You wish they had these, but you’re OK if they don’t. Who have they dated before? Can they help you with your project? Do they have a nice family you get along with? Will they come with you on the scary rollercoaster ride?
OPTIONAL are the nice-to-haves. This is where this dating metaphor gets awkward because I can't think of a good parallel for follow-on strategy, and fund performance. But hey, just think about this as bonus points. Do they have your dream car? Are they insanely good at table tennis? Did they go to college with LeBron James? If you have options, then you get to be particular and get to these nice-to-haves.

The Checklist

Critical

Lead vs. Follow
First and foremost, find out if they lead rounds or follow only. Without a lead, you may struggle to ever get a term sheet, because everyone else is waiting for a lead investor. Let this be the first thing you find out, so you know whether they’re going to be one of the first yes’, or last yes’. It's OK if they only follow, it just means you’ll have to come back to them later.
Sector / thesis
Do they invest in your vertical/industry? If they’re a deeptech investor, they’re likely not going to invest in your SaaS startup. You can usually find this out from their website, or Crunchbase before even getting on a call. If they’re vertical agnostic, then proceed to the next step.
Check size / startup stage
Is there alignment in terms of the check sizes they write. If it’s a $100M fund, they’re unlikely to write $50K checks - it just won’t move the needle enough for them. Thats just how funds work. If they’re a $2M micro-fund, they’re not going to write a $1M check. Figure this out early.
Geographic preference
Are you located in the location they invest? Yes, I know the world is remote, but...