Recently I was talking with an angel investor about his criteria for investing in tech startups. After sharing some of the standard ideas, like the 500 Startups Checklist for Investing in a Startup, he offered a great idea: ask the entrepreneur for their milestones over the next 90 and 180 days, write them down, and meet with the entrepreneur again at those intervals and see if they deliver.
Here are a few reasons entrepreneurs need to set milestones pre-investment and deliver:
- Pitching an idea is important, but executing and delivering results is 100x more important
- Relationship-fit with the investor is more important than the money. Also, investors like to build a relationship over time before investing.
- Self-sufficient entrepreneurs that figure out how to get things done are most desirable to investors
- Seeing tangible progress pre-investment helps the investor believe that investing will help accelerate success
Entrepreneurs would do well to develop relationships in advance of needing money and show a track record of results.
What else? What are your thoughts on entrepreneurs setting milestones pre-investment and delivering on them?