11 Factors to Consider When Selecting the Right Investors/Stakeholders for Your Business

by | Nov 21, 2023 | Blog

Selecting the right investors or stakeholders is a crucial decision for any business. To guide you through this process, we’ve gathered eleven insightful tips from Founders, CEOs, and other leaders. From prioritizing communication and expectations to valuing an investor’s network reach, these experts share their key factors to consider when choosing your financial partners.

  • Prioritize Communication and Expectations
  • Choose Investors With Shared Enthusiasm
  • Align Company and Investor Values
  • Consider Scalability in Investor Selection
  • Assess Potential Investor Impact
  • Find Engaged and Accountable Board Members
  • Know Investors on a Personal Level
  • Harmonize the Vision With Project Objectives
  • Understand Investors’ Regional Preferences
  • Ensure Timeline Alignment With Investors
  • Value an Investor’s Network Reach


Prioritize Communication and Expectations

When choosing investors, I pay close attention to their communication styles and expectations. It’s important that they communicate clearly and are upfront about their expectations for returns and involvement. An investor who is transparent and sets realistic expectations provides a foundation for an honest and effective working relationship, ensuring that there are no surprises down the line that could disrupt the business’s progress.

Ryan Hawker, Founder, H3 Home Buyers


Choose Investors With Shared Enthusiasm

In choosing investors for our sportswear brand, I prioritize commitment, seeking individuals who share our zeal for promoting a healthy lifestyle. For instance, I once met with a potential investor who, despite his financial clout, was a mismatch for us. He seldom exercised and was disinterested in sportswear outside of profit margins. It was a meeting over an impromptu lunchtime run that led me to our ideal partner. Panting and eager, she matched my pace and our vision, talking passionately about her fitness journey. That’s when I knew we had found more than an investor—we had found a champion for our brand’s ethos. Such alignment is the cornerstone of our stakeholder relationships.

Jay Barton, CEO and Founder, ASRV


Align Company and Investor Values

As a fintech startup, having investors has proven vital for our success in the market. When it comes to choosing the right investors, what really made more sense was to align our values. We believe in the power of small businesses and nonprofits to make a real change in the world, so we dedicated our financial services to these demographics. We were lucky to always have reached the right investors with the same values as ours.

Jean Smart, Founder and CEO, Penelope


Consider Scalability in Investor Selection

Considering scalability when choosing investors or stakeholders is crucial for business success. Scalability, the ability to grow efficiently, benefits companies by enabling expansion without excessive costs. Investors who grasp this concept facilitate adaptation to changing markets and emerging opportunities. This adaptability lets businesses meet evolving customer needs, integrate new technologies, and explore untapped markets. Collaborating with scalability-aware investors fosters an environment conducive to long-term success, ensuring competitiveness in a dynamic business landscape. The ability to scale without constraints is a game-changer, allowing businesses to reach their potential while avoiding hindrances to progress.

Travis Willis, Director of Customer Success, Aspire


Assess Potential Investor Impact

The potential impact of an investor is an important factor to consider when selecting them. You can assess this by looking at their financial and market positions. This will help you understand if their position enables them to back you in the long run. An important point while doing this is to look at their environmental impact as well. An investor can only help you if they have a solid position in the market. If they have a positive impact on society, it will reflect well on your company.

Perry Zheng, Founder and CEO, Pallas


Find Engaged and Accountable Board Members

Oh man, choosing only one factor is really tough. Find good board members—ones that add value to your organization and its growth plan. They should be ones that are invested in its success and the steps that will be needed to get there. If that means giving them equity—tied to clear deliverables and well-articulated and measurable goals—then do it! Your board members should be engaged, asking questions, participating, and holding you accountable! If you aren’t nervous before a board meeting, then your board isn’t doing its job. Equity can be very well spent for the right stakeholders, but be smart about it.

Katherine Lagow, VP of Operations, FleetNow


Know Investors on a Personal Level

Know them on a personal level, if at all possible. You can do all of the research you want into their financials, business history, practices, etc., but nothing quite helps you get a read on how the partnership will go better than knowing them on a personal level. The personality behind the money and business practices is just as important for a potential investor as their financial backing, as they will have a significant amount of influence on what you do.

Onno Halsema, CEO, Contentoo


Harmonize the Vision With Project Objectives

Choosing the right investors or stakeholders is pivotal, especially regarding the harmony between their vision and the project’s objectives. This congruence lays the foundation for a robust partnership, enhancing the prospects for success. Opting for allies whose aspirations resonate with yours paves the way for a united effort, capitalizing on collective strengths and resources. It’s also vital to consider what unique skills and past experiences these investors bring. Their insights and expertise can be instrumental in navigating challenges and seizing opportunities. By aligning with stakeholders who share your vision and contribute valuable knowledge and experience, you create a synergistic environment where each party contributes meaningfully to the project’s advancement. This strategic alignment goes beyond mere financial investment; it fosters an environment of mutual understanding and support, essential for long-term growth and success.

Saneem Ahearn, VP of Marketing, Colorescience


Understand Investors’ Regional Preferences

One aspect of choosing investors is understanding their regional investment preferences. Investors often have a preference for areas where they can easily attend board meetings or take advantage of local tax breaks. It’s essential to delve into their investment approach, where their teams are based, and any regional focuses they might have. For instance, if they haven’t yet invested in your region, it doesn’t mean they’re not interested. It might simply be a matter of timing or the right opportunity. Aligning with such stakeholders ensures they’re not only financially but also geographically committed to your venture’s growth.

Matias Rodsevich, Founder, PRHive


Ensure Timeline Alignment With Investors

Timeline alignment is incredibly important. The vast majority of capital fights I have seen are related to incorrect timeline expectations. Don’t try to fund a seven-year turnaround with five-year expectations. In the debt world, this will just lead to default. In the equity world, it will lead to broken relationships and a rough path back to further investment and collaboration.

Trevor Ewen, COO, QBench


Value an Investor’s Network Reach

One often-overlooked yet vital factor is the investor’s network and ability to open doors that might otherwise remain closed. I look for investors whose connections are relevant to my business’s growth and who are willing to actively make introductions. Their ability to expand our reach can sometimes be more valuable than the investment itself, as it can lead to new opportunities, partnerships, and customers.

Farhan Zafar Khan, CEO, Book on Board

Sign up for the Newsletter

Get the newsletter and stay plugged in.


The next evolution of business


Find out how to engage with upcoming events.

People + Profit Show from Conscious Capitalism Arizona
People + Profit Show from Conscious Capitalism Arizona
Sarah McCraren and Jeremy Neis

Free enterprise capitalism has served to lift more people out of poverty than any other socio-economic system ever conceived, empowering social cooperation, human progress, and elevating humanity. Good business is the answer to many of the global issues humankind is facing and that is what will dive into on this show as we interview business and community leaders from around the state of Arizona who are building businesses that really take care of people AND the bottom line.

Recent Posts

How Conscious Capitalism Addresses Societal Challenges

How Conscious Capitalism Addresses Societal Challenges

Conscious Capitalism is more than a philosophy; it's a pragmatic approach to tackling societal issues, as explained by founders, CEOs, and presidents. From the empowerment through art industry shifts to prioritizing stakeholder well-being, we explore four compelling...

Can Conscious Capitalism Align With Profitability?

Can Conscious Capitalism Align With Profitability?

In the quest to understand the relationship between ethical business and financial success, we've gathered insights from seven industry leaders, including presidents and CEOs. They delve into whether Conscious Capitalism can indeed coexist with profitability, from the...