SaaStr 770: How to Avoid a Bad VC Investor with SaaStr CEO and Founder Jason Lemkin

The Official SaaStr Podcast: SaaS | Founders | Investors

SaaStr 770: How to Avoid a Bad VC Investor with SaaStr CEO and Founder Jason Lemkin

In our latest episode, SaaStr CEO and Founder Jason Lemkin delves into 11 ways you can identify bad investors before signing a term sheet. Use this 11-part test to avoid common pitfalls:

1. Do reference checks
2. Ask if they write second or third checks
3. See how many control they want
4. Figure out their long-term goals
5. Ask about the lows too
6. Ask about outside CEOS
7. What was their worst investment?
8. Ask what CEO they're a fan of
9. Should you ask your potential investors to sign an NDA?
10. The best advice if you're going from bootstrapping to venture capital to avoid a mistake
11. If you are offered a second check, how picky should you be?

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SaaStr hosts the largest SaaS community events on the planet.

Hey everybody - thanks to the 10,000 of you who came out to SaaStr Annual. We had a blast and big news -- we'll be back in MAY of 2025. That's right, the SaaStr Annual will be a bit earlier next year, May 13-15 2025. We'll still be back in the same venue, in the SF bay area at the 40+ acre sprawling san mateo county events center. Grab your tickets at saastrannual.com with code jason50 for an extra discount on our very best pricing.

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This episode is sponsored by: remote.com

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This episode is sponsored by: Anrok

A question for SaaS finance leaders, do you know where your customers are? Anrok tracks where your sales are creating exposure, and automates tax calculation and filing worldwide. Built for high-growth software companies, Anrok protects your revenue and saves you time. Visit anrok.com/saastr to learn more.