Qualifying Investors
Similar Investments
Qualifying investors starts with understanding their prior work in your operating space.
When qualifying a given investment firm for your upcoming round, the most important consideration is often any prior investments they have made in your specific operating space. On Metal, within the investor profile, users can view investments by each investment firm that are “most similar” to their Company. The below visual shows the range of possibilities:
Understanding a given investor’s prior work in your specific semantic space can be immensely beneficial for a broad variety of reasons.
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Scenario 1 -- Invested in Direct Competitors
Investor has invested in direct competitors, which are defined as companies pursuing the same customers as your Company. As an example, if the user is building a food delivery company in the US, then food delivery companies in Finland are not direct competitors; instead, only those in the US will be considered direct competitors.Actionable Insight: Avoid these investors unless the firm in question is an accelerator. Many accelerators, including YCombinator, invest in direct competitors. This is, however, rare and VC firms typically do not invest in companies that compete directly.
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Scenario 2 -- Invested in Similar Companies
Investor has invested in similar companies that are serving a similar customer with a similar solution. The solution may not be identical to that of your Company, but it is directionally similar.Actionable Insight: Prioritise these investors, as they already believe in the broader direction in which you are building.
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Scenario 3 -- Invested in Adjacent Spaces
Investor has invested in adjacent spaces, but has not yet invested in your specific category. As an example, if you are building a product focused on AI for Customer Success, perhaps the investor has invested in AI for Sales Outbound. This would be an example of an “adjacent” space.Actionable Insight: Prioritise these investors, as they already believe in the broader direction in which you are building.
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Scenario 4 -- No Relatable Investments
In this scenario, which is fairly rare, it is important to not make assumptions. Ultimately, there could be a very broad set of reasons for why a given investor hasn’t invested in or adjacent to your space. There is no actionable insight in this scenario; it is, however, still important to be aware of this going into calls with the investor.