Steve Goldberg is a partner at Finistere Ventures, an early-stage venture fund focused on food, agriculture, and sustainably feeding the world. This is our fifth article from a single half-hour interview.
When Steve evaluates a company there are certain red flags he looks for.
The first is mismatches between the execution plan and the fundraising. This doesn’t surprise me as I often see draft investor presentations made with the raise-amount set but no budgets, timelines, or milestones.
Second is companies that are asking for money too late or too suddenly. A company should know when it is going to run out of money and how long it will take to raise money and then be able to do a little bit of math. When they haven’t, it’s not a good sign.
Finally, companies that can’t provide appropriate references, or otherwise fail a reference check. I’m always glad to see when a firm is properlly checking references. All too often this step is skipped leading to unnecessary risk and failure.
As a start-up worthy of investing in, you should be able to avoid raising these red flags.