🚀 How to find founder-investor fit?

3 tactics to find founder-investor fit

🛠️ Specialized expertise

• Identify where you need "heavy lifting" (e.g., hiring, or enterprise sales)

• Build a cap table of specialists (rather than generalists), so that you have a diversified group of specialists overall.

• Consider these questions to evaluate potential investors:

  • Vertical depth: Do they truly understand this category?

  • Horizontal breadth: Do they see how their specialty integrates with your broader mission?

  • Proven playbook: Have they successfully scaled companies at this specific stage?

  • Market access: Can they open doors to your target verticals?

  • Founder alignment: Do they know how to scale founder-led teams without breaking the culture?

👥 Strategic network

• Target investors who provide more than just capital and can act as a force multiplier for you

• Consider if investors can help with:

  • Sourcing talent: Prioritize investors with firsthand experience in what "great" looks like across key functions (e.g. product, engineering, go-to-market)

  • Acquiring customers: Look for "super-connectors" who can introduce you to design partners, navigate complex negotiations, and shorten your sales cycle

  • Fundraising: Choose partners who can bridge the gap between your raw financials / data (e.g. revenue, retention rates, cohort analysis, market sizing, cross-selling etc) and your fundraising story

🤝 Operational compatibility

• Ensure your “ways of working” (modus operandi) are aligned; an investment is a long-term marriage. Consider:

  • Are you and your investors aligned on the definition of success in the long-run?

  • Do you trust these investors enough to be your first call during a crisis?

  • Would you hire them as an advisor even if they didn't bring a check?

• Do founder reference checks on investors you’re considering. Talk to their portfolio founders and ask:

  • Who actually gets in the trenches when things go sideways?

  • Who takes ownership of bad decisions (vs pointing fingers)?

  • Who delivers on their promises with 100% consistency?

2 traps to avoid

🚨 Prioritizing valuation over fit

• Fit > money. An investor whose values, ethics, and "ways of working" align with yours will foster a more long-term and successful partnership — this is a relationship you’ll be managing daily over the next 5-10 years

• A lower valuation with a perfect partner beats a high valuation with a poor fit every time

🚨 Trying to convince instead of moving on

• Stop trying to convince investors who don’t "get" the problem because of lack of experience (assuming that you’re articulating the problem clearly)

• Find investors who already invest in your space and therefore will understand your value proposition easily. Take the path of least resistance to reach a "yes"

1 tool to leverage

📖 Best practice on founder-investor fit

• Relationship first: Focus on 3–5 key VCs to build a deeper relationship — well before you need to start fundraising. When it comes to relationships, prioritize quality over quantity

• Use tools like OpenVC to vet portfolios, track records, and investment criteria of investors before your first meeting

Bonus: 1 trend to spark startup ideas

📈 Embedded fintech as the OS

• Vertical software is shifting from standalone tools to full-scale business operating systems. By embedding payments, lending, and payroll, platforms like Toast and Shopify have created a Win-Win-Win Model:

  • Business owners: Seamless financial tools integrated into platforms they already use

  • Software platforms: New revenue streams and higher lifetime value via embedded fintech

  • Financial service providers: Proprietary data for better underwriting and near-zero CAC

• Why embedded fintech is winning:

  • Distribution advantage: Vertical ERPs are the "home screen" for SMBs; being the default payment path is an unbeatable moat

  • Incumbent circumvention: AI allows challengers to embed accounting and insurance directly into workflows, bypassing traditional banks

• The next wave of fintech isn’t just better financial tools; it’s changing how businesses access financial services by embedding them directly into the platforms where work already happens:

  • AI-powered bookkeeping and tax automation inside vertical ERPs

  • Embedded lending and capital tools tailored to specific industries

  • Niche embedded insurance solutions for SMB verticals

  • Payments and procurement infrastructure built into everyday workflows