Jeffery Potvin – You Must Do Your Due Diligence on Investors Too

BIO: Jeffery Potvin is an angel investor in multiple regions and has invested in 55+ companies. He is a member of seven angel groups and screening committees while being the driving force behind Open People Network (OPN)! OPN is a group of angel investors helping accelerate the growth of early-stage startups.STORY: Jeffery’s company had been working on and off with this startup for about two years. When the startup came back with a product and an investor, Jefferey took interest, and even though he had some doubts, he trusted the startup. It turned out his gut was right because the investor never held his part of the deal.LEARNING: Walk away from anyone trying to pressure you to close a deal and have the proper documentation in place before you sign the contract. The ultimate validation comes from your customer. “Look for resources, educate yourself, learn and dive right into it. Build that product, then find that angel investor.”Jeffery Potvin Guest profileJeffery Potvin is an angel investor in multiple regions and has Invested in 55+ companies. He is a member of seven angel groups and screening committees while being the driving force behind Open People Network (OPN)! OPN is a group of angel investors helping accelerate the growth of early-stage startups through The Supporters Fund and Pitchit Series. Jeffery is a lifelong entrepreneur with a proven track record of building companies and reinventing existing businesses. He has worked with a list of great clients, from startups to enterprises, over the years. Jeffery is a mentor, coach and loves to climb mountains.Worst investment everJeffery worked with a company for about two years on and off, helping them through their journey. An opportunity came up to invest in this new emerging company that had some great IP. The company had found an investor that would help them with the production. The investor was going to contribute considerable funds too.Getting deeper into the business ideaJeffery went through this process of doing a deep dive and analysis around the business. He requested that he meet with the investor who would pick the ball up and put a lot of money in to make this company successful.Jeffery met the investor, and as he started to pick their brain and learn more about them, he asked them questions because he had doubts. However, he never admitted his misgivings; he just kept going forward.Ignoring hisJeffery’s gut still told him that something was not right. But because he had been working with the startup for such a significant amount of time, he trusted that they had picked the right investor.Jeffery did not want to slow down the progress, so he ignored his gut, did all of the analysis, came back, and signed off on the deal.The truth comes outJeffery signed everything off, and everything was good. About six months into the project, when the final handoff was supposed to happen, the unforeseen happened. Once everything was solidified and sorted out, the investor ended up having creditors coming after them, and they went bankrupt. Everything they had worked hard for went down the drain just because of one person. If only Jeffery had listened to his gut.Lessons learnedWalk away from anyone trying to pressure you to close a dealIf there is any panic or pressure to close a deal, walk away. There’s a reason they’re putting that pressure on you. They’re probably in debt or something else. There’s always a problem when it’s high pressure. Nothing needs to be solved in five minutes; you should...