the people behind the capital

How to spot the red flags before you sign the term sheet.

Jul 03, 2025

There’s a moment in every startup where it feels like you’re treading water in the middle of the ocean. No land in sight. No buoy to hang onto. Just you, your idea, and the mental math of how long you can keep kicking before the waves take you out.

And then, finally, a lifeboat appears.

It’s got a name, a checkbook, and a LinkedIn banner that says something like “early-stage investor | ex-Goldman | founder whisperer.” You’re exhausted. You’re hopeful. You climb aboard.

Only later do you realize: that lifeboat came with an anchor.

I hear this story all the time. Founders who were desperate for belief (and capital) and said yes too fast. Because when you're underwater, any "yes" feels like oxygen – even if it turns out to be a little toxic.

To be clear: not all capital is bad capital. I’ve actually had mostly positive experiences. But that wasn’t luck alone. It came from learning to ask better questions, trust my gut, and remember that this whole thing is a long game – not a scramble for survival.

So if you’re out there in the water and a hand reaches down to pull you up – pause for a second. Float a little longer. The right lifeboat will still be there. And the wrong one isn’t worth sinking for.

Here are the four questions I ask myself before saying yes to any investor, term sheet, or “friendly” check. I hope they help you stay afloat:

What kind of people do I actually want in my life?

This question isn’t just about money. It’s about values.

If you could choose the room you’re in for the next ten years, who’s in it? For me, it’s smart, kind, ambitious, level-headed people. People I’d trust for advice whether or not they’d written a check. And people I’d want to work through a crisis with, not just celebrate the wins.

When I started fundraising, I tried to pay attention to how investors showed up—across emails, Zooms, diligence, delays. Were they engaged? Were they thoughtful? Did they follow through? Or did they disappear for weeks at a time, give vague feedback, or seem more interested in trends than people?

You get a lot of information before you ever sign a term sheet. Trust what you notice. If someone makes you feel uneasy now, that won’t improve once the stakes are higher. When you start to see red flags, RUN, don’t walk

Would I feel okay calling them when things go wrong?

Because they will, at some point. Startups are bumpy. If you hit a wall or miss a target, would you feel safe picking up the phone to share what’s happening? Or would you rehearse the email twenty times before pressing send?

That answer matters. Your best investors aren’t just there when things go well. They’re the ones who stay calm and constructive when they don’t. If you feel intimidated, dismissed, or like you have to earn their support with performance—keep looking.

Do they actually understand what I’m building?

This might sound obvious, but it’s not always clear in the room.

Some investors will be excited by your traction or your deck or your category—but when it comes to the real work ahead, they’re not actually aligned. They don’t understand your stage, your customer, or your roadmap. They like what’s hot, not necessarily what fits.

That’s why my number one filter is: do they get it?

Do they see the potential? Do they understand the nuance? Do they believe in the problem you're solving? And are they aligned on the path to success? If yes, they’ll stick with you. If not, they’ll likely check out when things get complex—or push for changes that don’t make sense.

Is their capital clean and aligned with where I’m going?

Not all checks are simple.

Sometimes money is coming directly from a person or a fund you know. Sometimes it’s pooled together from a network of angel investors you’ve never met, which might sound fine—until you realize one of those people has completely different expectations or priorities.

It’s worth asking:

Where is this capital actually coming from?
Does the structure add clarity—or confusion?
Are these people aligned with the kind of business I’m trying to build?

Money can be helpful or heavy. It’s not always clear on paper, but it often becomes clear with time. Ask these questions first to suss out what you’re dealing with.

Final thought: take your time choosing the boat. It’s normal to feel urgency when you’re raising. But urgency can cloud your ability to see clearly. It’s okay to wait a little longer for the right fit—someone who understands your business, supports your pace, and genuinely wants to see you win.

You’re not just raising capital. You’re building relationships that could last a decade (or more). Choose the people you’d want with you in the boat—not just when it’s sunny, but when it storms too.

Now for the fun part of our weekly chat (!) I was in Aspen a few weekends ago—hiking, biking, spritzing, you know, the usual—and I’m still day dreaming about the trip. As an homage to that sweet lil weekend (and a packing list for my next one coming up in a few weeks), here’s everything I packed, wore, and shopped.