What to know before you take that first investor check

At Forum, we’ve been in your shoes as early-stage founders. We know what it feels like to raise that first bit of capital, to get that external validation, and to feel like you’re off to the races. We also know how crucial it is to find the right initial investor(s) to fuel your company’s success. 

Raising capital is just the beginning. The most valuable investors bring more than funding. They bring perspective, expertise, and support. When your early backers deeply understand your market, spot overlooked opportunities, and make customer introductions. When they understand the founder journey, they can help you avoid common pitfalls, help you see around corners, and make smarter long-term bets. 

Let’s talk about how to ensure that happens. 

Questions you should ask yourself as you talk to early investors

Are the equity terms aligned with the size of the check?

Early capital can be a lifeline, but protecting your cap table is just as important as securing the funds. While some dilution is expected, it’s important to ensure the tradeoff reflects the level of support and value an investor brings. The best early investors aren't just capital providers, they’re strategic partners who earn their stake through time, expertise, and belief in your potential.

Green Flag: An investor whose equity ask reflects both market norms and their commitment to helping you grow: bringing support, guidance, and long-term partnership, not just a check.

Do they value early validation?

It's crucial that early-stage companies prioritize understanding real customer needs from the outset. Startups thrive when they optimize for validation over premature building to ensure that when they go to market they are meeting a clear demand. An investor who understands the importance of extensive, early validation and will be hands-on with the process is invaluable. Furthermore, investors who are well-versed with AI tools that can expedite this process and make it significantly more efficient and valuable bring a huge advantage to your early-stage journey. It’s also a significant plus if they are willing and able to help you pivot depending on where that validation process takes you.

Green Flag: An investor who champions early and thorough customer validation, understands the power of AI in this process, and supports your ability to adapt based on findings.

Did they ask you the right questions in the room?

You can learn a lot about an investor by the questions they ask. Are they only focused on financial metrics or are they trying to understand your vision, your customers, and your long-term strategy? Do they challenge your assumptions constructively, or are they just checking boxes?

Great investors dig deep. They want to understand how you think, what motivates you, where you might hit walls, and how you plan to break through them. Their questions show what they value and how they’ll show up for you post-investment. If they’re focused on unit economics at a stage where customer validation matters more, they might not be the right partner for your journey.

Green Flag: An investor who asks thoughtful, nuanced questions that reveal both domain expertise and a genuine desire to understand your business and how you operate as a founder.

Were they receptive to your questions in the room?

A strong investor relationship is a two-way street. An investor who is open, honest, and thoughtful in their responses to your questions signals a collaborative and respectful partnership. So is an investor that opens the floors for questions, and is willing to dive into their own failures and learnings. 

Green Flag: An investor who is receptive to your questions, providing clear and considered answers.

What Can Founders Do to ensure the right fit

Build real relationships

The strongest founders lean on authentic, strategic relationships before and after fundraising. They don’t just collect contacts; they cultivate real allies who can offer capital and context. Whether you’re raising now or six months from now, be very intentional about spending time with an investor before they take any capital. Think of it as "dating" them before jumping into a long-term commitment.

Use non-dilutive wisely

Grants and partnerships can be incredibly powerful but only when they align with your business model. If you choose to pursue non-dilutive capital early on, treat it with the same strategic scrutiny as equity. Consider hiring a grant writer if needed.

Ask the right questions

The right questions can reveal far more than a pitch meeting alone. Ask about how they’ve supported companies like yours. Ask what they’re like when things don’t go as planned. Ask what kind of founder thrives with them—and what kind doesn’t. You’re not just choosing capital; you’re choosing a long-term collaborator. Treat it like hiring a key team member, because that’s exactly what it is.

It’s OK to say no

Not all capital is good capital. It’s okay to pass on a check that doesn’t come with strategic upside. It’s okay to wait. Rushing into the wrong partnership can cost more than waiting for the right one.

Final Thoughts: Take Your Time

The first check you take can set the tone for everything that comes next—your strategy, your momentum, even your confidence. That’s why it’s worth holding out for the investor who gets your business and gets you. Yes, the journey will have setbacks. But with the right partner at the table, those setbacks become stepping stones. At Forum, we’ve seen firsthand how the right early relationship can help a founder navigate failure, regroup, and come back stronger. It's not just about capital—it's about who you’re building with.

FAQ

Why do some startups face challenges even after raising capital?

Because capital doesn’t solve fundamental business issues. Founders need the right partners who will be honest and in your corner. Money alone isn’t enough.

What’s a significant indicator of potential early-stage challenges?

Taking money from the wrong investors or diluting too early. Misaligned capital sources can lead to long-term issues.

Is non-dilutive funding preferable to VC?

It depends. Grants and partnerships can be incredible, but they must align with your business and capacity.

What should founders prioritize post pre-seed?

Customer validation, revenue generation, and hitting clear milestones that lead to follow-on funding or sustainable growth.

How can I navigate these crucial early decisions effectively?

Lean into community. Work with investors who’ve done this before. Don’t rush. Focus on progress over optics.

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