What do you feel is fair and equitable to ask a unknown investor (foreign) before you would start in earnest to negotiate an investment?
Would you increase that level in a regulated industry?
Due diligence on potential investor
Answers
Depending on the size of the business, investment and form of the investment, I'd be very curious to know answers to all kinds of questions, including but not limited to:
- What is his/her rationale for the investment?
- What involvement, if any, do they see for themselves (completely passive, BOD, advisor, unofficial ambassador of some kind perhaps)?
- What is their exit strategy and expectations?
- What is their experience with these types of investments?
Depending on how those questions go, the conversation may be over or lead just about anywhere.
There's nothing worse than a bad match between an investor and a company.
Do you feel are required under the Patriot Act to "know your customer"?
2
Wayne - the "know your customer" from my point view is not so much a Patriot Act consideration but more of a Foreign Corrupt Practices Act (FCPA)consideration.
Allen - It's actually both, since the Patriot Act talks ad nauseam about money laundering.
Another question to consider when vetting an investor:
What resources do you bring to help the company grow. (
backing and expertise, etc.
Before I even ask "are they a fit to us ", I would ask (1) Are they legit investors? (2) Do they even have the money? (3) as Allen and Wayne has pointed out Patriot Act and FCPA.
The Nigerian prince and the British Barrister wanting to send me money and invest comes to mind. I joke of course but it gets the point across.
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FP&A