7 Signs of When Investors Like You

This week's tip: the 7 signs to know when an investor is interested in you

During my time as VC, I would instantly know whether or not I liked a company. There wasn't anything in particular that would set me off - it was just a feeling. When this happened, alarm bells would ring in my head that this was a founder we could potentially invest in.

It was on.

I knew I had to win this person's heart and interest. I went from being potentially interested to being genuinely interested and took certain actions to demonstrate to the founder that we were serious.

During your fundraising journey, you may observe changes in the level of interest from potential investors. It's difficult to know for sure without experiencing it first-hand, but after a few successful fundraises, you start to recognize the signs. It's subjective, but also one of the most important things to get right in order to focus on investors who are more likely to provide a term sheet.

While practice is the best way to learn how to identify when an investor is interested in investing in your project, there are several key indicators to watch for.

Here’s 7 signs to look out for:

1. They are active and engaged

When I was excited about a company, I made sure to constantly communicate with the founder.

I knew that speed and communication were important factors in their decision-making process, so I never let more than 3-4 days go by without at least sending an email. During our meetings, I made sure to be active and engaged when asking or answering questions, and made our intentions clear. If an investor is not being active with their communication (e.g. letting more than a week go by before the next meeting), then they most likely aren't that interested in you.

2. They request additional information

When I was really interested in a company, a simple 30-minute introductory meeting was never enough for me. I wanted to know everything I could about the company and usually had two or three major questions that I really wanted to focus on. This involved spending my own time researching the industry, and I typically requested more detailed information to answer my questions. If an investor is doing the same thing, it shows that they are moving beyond initial curiosity and actively considering an investment opportunity. This is especially true if they want to spend their own time delving into your thesis.

3. They book follow-up meetings

When I first started out as a VC, I lost a Series A round purely because of my own hubris. I made one of the first mistakes every investor makes: being too slow and losing a deal.

Speed is everything when it comes to great funding rounds, and investors understand this well.

If an investor is excited by your opportunity, they won't wait to set up follow-up meetings. They'll want to arrange these meetings either during or soon after the previous meeting, often trying to find excuses to meet again and delve deeper or to introduce you to other people. This willingness to invest time and effort into further discussions indicates a higher level of interest.

4. They are pro-active in their research

An investor who is genuinely interested in partnering with you will often conduct research proactively. They will want to speak to other people in your team, experts you may know, or stakeholders around your business. If they are proactive and willing to spend time researching, they are most likely interested in your opportunity.

5. They tell you they like your industry

Although it doesn't always happen, sometimes you can be extremely lucky and find an investor who is focusing their research on the same industry as you. This is a significant advantage, especially if they explicitly tell you that this is part of their investment criteria and something they are excited about.

They may express enthusiasm for sectors or stages similar to yours, in which they have a strong track record or a shared investment thesis, showing that they recognize the value they can bring to the table.

A great example of this was my last investment in Quit Genius (I led their $12m Series A), where I made sure to communicate that we were experts in their field (Cognitive Behavioural Therapy) and had made other investments in that space from the beginning.

6. They demonstrate commitment 

An investor who is seriously interested may show signs of commitment, such as expressing a willingness to invest a significant amount of capital, discussing potential co-investment opportunities, or exploring ways to collaborate beyond a monetary investment.

Typically, they will initiate meetings to discuss how to reach the next milestone or raise, and what that will look like.

They set up these meetings, because they want to observe your behaviour in a quasi-board meeting and try to build a more friendly relationship with you. As long as they keep demonstrating what it would be like to work together you can know they are interested in investing into you.

7. They start to sell to you about why they are a great fund

One of the easiest ways for me to tell if my colleagues were interested in a company during investor meetings was at the end. If any of my colleagues started to sell our fund and explain why we were great, I knew that they wanted to invest. One way for you to make sure you know if an investor is like this is to control the meeting and master your intro meetings.

There is a fine line here however. The difference between an investor telling you what their fund does and selling to you why they are amazing is big.

If you can get the latter, it shows that they really care about you and want to win you over. This is the big one - the one where you can know you are most likely going to get a term sheet.

Get them to start to sell to you!

Conclusion

It's important to note that each investor is unique, and there may be variations in how they express interest. This may manifest as only one or a few of the following behaviours: some investors may be more reserved, while others may be more vocal and proactive.

As a founder, it is crucial to maintain open lines of communication, be responsive to inquiries, and engage with potential investors. This will help you understand their level of interest and align expectations effectively. By doing this you can focus on the investors that matter.