What is “Smart Money”?

As builders and founders we often hear the advice to find Smart Money, rather than just money (or dumb money?? if there is such a thing.)

So working with the founder of another local startup we started to put together a list of what Smart Money really means to us.  Here’s the list, let us know what you think.  Note that this list is for Web/Mobile products and startups, not as fully applicable to other types of startups.  Each criteria gets it’s own weight based on your specific needs but perhaps this will help in getting some sense of a standard.

Generally smart:
– Experience in starting and building a web/mobile company in the last 10 years.
– Experience building and growing web apps or websites
– Have built or was deeply involved in building and growing native apps as part of their past/current business.
– Knows and can provide real-life advice on growth marketing and “the new customer acquisition” methods.
– Access to funding and recruiting leads.
– Access to prospective customers.
– Social media savvy.
– Has liquid funds to invest in your time frame.
– Expresses passion about the concept. (gets the vision quickly)
– Be experienced enough to help when things get rough, not jump the gun.
– Does not meddle daily in operations.
– Respects the leadership of the team.
– Experience in exiting companies.
Really smart:)
– experience in your specific vertical.
– B2B and/or B2C experience – depending on your model.
– Has access to c-level executives in customer orgs.
– Has deep and active network in your network.
Of course as they say all money is good.  BUT, is it really?  Have you ever experience being married to the wrong investor?  Bottom line, it’s better to not work people you don’t really feel excited about than to take anyone’s money, specially as first time founders.  If you have past experience in funding and building new enterprises from the ground up you will know how to handle even “just money” investors properly.  Until then make sure you find the right investor for your new venture.

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