What Should a Founder Learn About an Investor's Past Deal Behavior?

Learn how the investor handles a deal from the first conversation through funding and the relationship that follows. An investment strategy describes what someone prefers. Past transactions can show how they make decisions and communicate when circumstances change.

Ask About Completed Transactions

Ask the investor to describe deals similar to yours and explain how those opportunities were sourced and reviewed. Find out what information they needed, who took part in diligence, what drove the decision, and whether the process followed the expected timeline. Ask what happened when a deal faced a setback or missed a target. The goal is to understand their working style and decision process, not to collect promotional stories.

Ask whether they can introduce you to founders or sponsors they have backed. With permission, speak to references about communication, follow-through, the time required to reach a decision, and whether the investor met stated commitments. You can ask how disagreements were handled and whether the investor's involvement matched expectations. When possible, consider multiple perspectives; one account may not show a consistent pattern.

Look for Consistency

Compare what the investor says with what you can confirm. Do past transactions fit the strategy they describe? Do they explain clearly when they declined an opportunity or changed course? Are expectations about control, reporting, follow-on funding, and involvement consistent across discussions and written materials? If answers shift, ask for clarification and document the agreed terms.

Learn what they expect after investing, too. Some investors prefer regular updates and close working relationships; others take a less active role. Ask how they handle requests for information and introductions, along with requests for additional capital or changes to the business plan. Discuss expectations before signing so both sides understand the relationship.

Use What You Learn in Your Decision

Record your findings and compare them with your company's needs. A strong fit depends on the investor following through and their approach working with your operating plans and governance. A polished reputation alone does not answer those questions. One difficult deal also does not prove a lasting pattern. Focus on specific cases and clear answers, and ask references to describe their own experiences.

If a claim cannot be confirmed, treat it as unconfirmed and ask for a reasonable way to resolve the gap. Keep the diligence professional and reciprocal. You are evaluating each other, and clarity about the deal helps build confidence. For related preparation, see how to confirm an investor has funds available and how to assess strategic fit.

Read next: What information can help confirm that a prospective investor has funds available? and How should a founder verify an investor's authority to make an investment?

You can't really see who's on their team when you look at their website because they don't have much of a team, maybe just a one, two, or three-person organization.

Sources: Richard C. Wilson solo transcripts, The Single Family Office. Informational only, not financial, legal or tax advice.