Perform Due Diligence on Potential Investors

Before your company receives an infusion of equity capital—whether from a venture capital firm or an angel investor—an investigation into your operations usually takes place. The process is commonly known as due diligence, and it can be grueling since the investor uses it to try to uncover weaknesses, potential liabilities, and risk exposures.

I propose the following: why not perform a similar investigation on your potential investor? After all, she will essentially become your long-term partner. Knowing her background, in terms of prior deals, industry expertise, and executive stints, is important.