Raising Capital - What do Investors Want

[Derek L.]

If you ask people what potential investors in your business would want, the one things I hear a lot is they want a track record. I hear it time and again, and I know it's true. However, it can't be the only thing an investor would want, and if you don't have a track record (me), there must be other appeals one could play to.

This question is obviously open to anyone, but I would especially appreciate answers from someone who has invested in another person's deal. For example, someone who has shelled out 50k for repairs on a flip that he/she wasn't managing. Or someone who was a silent partner putting up half of the cash for a rental property that he/she did not find and is not going to manage. What did you want out of your business partner that made you interested in investing (other than a track record) with them. I have some thoughts in mind, but I don't want to steer your comments. I would love to hear what you wanted to get out of a deal.

Also, if you look back on that deal, what thoughts did you have about the process? Would you say it was successful? What did you like that your partner offered, and what did you think he/she dropped the ball on?

Thanks in advance!

[J Scott]

If someone doesn't have a track record, here is what I look for:

- Collateral

- Personal guarantee (and assets to back it up)

- A great deal

- Low LTV

- A personal relationship

- Experience (and success) in other types of business/investing