TPP #38: Do you know your investor type?

When it comes to raising funds, knowing what type of investor you need is just as important as knowing how much you want to raise.

Not all investors are the same, and not every investor is a fit for your startup.

Approaching the wrong investors wastes time.?

Signing the wrong term sheet can cost you more than money, it can cost you control, focus, and even your company’s future.

Here’s 4 reasons why you should choose your investor type carefully::

1. Some investors focus on specific industries

They understand the space, the challenges, and the opportunities. Pitching your CleanTech startup to an investor who only funds SaaS companies won’t get you anywhere.

2. Some investors prioritize different stages of growth

Seed-stage investors are looking for high-risk, high-reward opportunities. Later-stage investors want to see stability and predictable growth.

3. Some investors offer more than money

Strategic investors bring expertise, networks, and connections that can accelerate your growth. Financial investors, on the other hand, focus primarily on returns. Knowing which one you need helps you target the right people.

4. Term sheets vary dramatically

The right investor isn’t just about funding—it’s about terms. Some investors will ask for a higher equity stake, a board seat, or specific milestones. Make sure you’re signing a term sheet that aligns with your vision.

So, how do you avoid knocking on the wrong doors?

• Research investors thoroughly. Look at their portfolio, investment thesis, and past deals.
• Understand what stage, industry, and type of startup they typically back.
• Be clear about what you’re looking for beyond funding, do you need connections, expertise, or just capital?

When you know what type of investor you want, you’ll spend less time pitching to the wrong people and more time building real opportunities.

The result? Better fit, stronger partnerships, and term sheets that support your goals.

Until next time,

Diana

P.S. We just launched a new service. It's called 'Roast My Deck' for those of you who aren't 100% confident in your pitch deck and want a second opinion! DM me and let's get started.