At the 2025 Entrepreneur Expo, the "Thinking Like an Investor" panel offered founders a rare, candid look behind the curtain, revealing the non-negotiable mindsets and strategies required to secure professional investment.
Moderated by Jean-Luc Park, deputy chief investment officer & senior director, Social Impact Funds, TEDCO, the discussion featured three investment experts: Aurelia Flores of Virginia Venture Partners, Dahna Goldstein with Halcyon Venture Partners and Mitch Brooks from High Street Equity Partners. Their collective wisdom distilled the high stakes fundraising game into five actionable truths every entrepreneur should know.
1. Venture Capital is a tool, not a default mandate
The most common mistake founders make is seeking venture capital (VC) simply because it sounds prestigious. The panel emphasized that VC is a surgical tool, designed only for businesses aiming for venture-scale growth—rapid scale with the explicit goal of a large exit (IPO or acquisition). If your model favors sustainable growth, VC is fundamentally misaligned and destructive.
As Goldstein put it, "revenue is the best form of financing, pretty much 100% of the time... if you're generating revenue, you don't owe interest on that revenue, you're not giving up equity for that revenue and also you're proving that your market actually wants your product."
The takeaway: Before pitching, calculate your true cost of capital. A $1.5 million equity raise on a $50 million company could cost you roughly $13 million in equity value long-term. Make sure to research and choose capital that fuels your specific ambition, not the one that's trending.
2. Diligence your investor: avoid bad money and demand alignment
Fundraising is the start of a 7-to-12-year business marriage. A bad investor can kill a company faster than a lack of funding.
The consensus was clear: "Bad money" isn't just passive money; it is actively detrimental. Goldstein elaborated on this risk: "Bad money isn't just somebody who's not necessarily going to be a value add. It could be somebody who's going to end up being a tremendous time suck, a tremendous energy suck. That is not somebody you want on a cap table."
You must vet your potential partner ruthlessly, ensuring alignment. Brooks emphasized: "When you're looking to raise funding, I think it's just deeply important to try to lock in and find investors at the intersection of what you're doing at the stage that you're in and at the sector and the vertical that you're focusing."
Furthermore, the relationship must be financially mutual. Flores highlighted the fiduciary duty of VCs: "Fund managers, we are fiduciaries. Our job is to make money for our investors. If you're not making money for us, sorry, our interests may not be aligned."
Don’t hesitate to ask questions and interview the investor to ensure both parties’ interests align, the support needed is present and all expectations are outlined. As Goldstein advised: "I think a lot of founders feel like they need permission to ask questions of their investors, you have that permission. Go and ask those questions... Is this somebody you want literally in your business for that amount of time? Getting to know somebody... is a really worthwhile effort."
3. Coachability and humility: the ultimate green flags
Investors fund people, not just ideas, seeking leaders characterized by deep self-awareness and coachability.
This means being humble enough to acknowledge skill gaps. Flores detailed the balance of expertise and humility investors seek: "We want to see that you're an expert in the field... If you come across as thinking that you know everything, that's a red flag to us that you may not be prepared. If we ask you something and you're not sure of the answer, it's really okay to say, 'You know what, I'm not sure. I have to do research on that, but I'll get back to you.'"
This contrasts sharply with the "red flags," panelists are wary of which signal a lack of market maturity:
- "We have no competition."
- "We just need 5% of the market."
- "We're a vitamin, not a painkiller."
For a better chance of success, the panel recommended individuals practice rigorous honesty about your team's weaknesses and demonstrate that you are a "learner, not a knower" who is open to mentorship.
4. Master the market’s history, present and future
Beyond humility, investors demand market mastery. It is not enough to have a good product; you must demonstrate deep, almost obsessive, knowledge of your domain.
Investors want to know that you understand:
- The market's history: Who failed, and why?
- The sub-segments: Where are the niche, underserved customer groups?
- The buying behavior: Why do your customers buy, and what is your current customer acquisition cost?
- This mastery is conveyed through exceptional storytelling, signaling your ability to recruit talent, sell to customers and attract partners. If your narrative isn't compelling, your growth will be constrained.
Make sure to focus on being a painkiller that solves a critical, costly problem for a defined group of buyers. If you can’t credibly articulate why your customers would be desperate to buy your solution, your pitch won’t survive diligence.
5. Treat fundraising as a coordinated marketing campaign
Fundraising should be managed with the same rigor and momentum as a major product launch. Beyond a single pitch meeting, deals are won through sustained effort and coordinated action.
The three most effective strategies are:
- Pre-Marketing: Socialize plans in advance to gather advice and build relationships before formally opening your round.
- Warm introductions: The most efficient path to an investor's time is a warm introduction, often sourced through university alumni networks or your existing circle.
- Consistent cadence: Maintain a routine update cadence with all investor prospects, even those who initially passed. Up to 50% of eventual deals come from founders who demonstrate persistent progress through these updates.
Overall, momentum is everything. Secure an early commitment to lead the round, then use that leverage to close the rest of your target list. Never stop building connections until the round is over.
The founder's next move
The panel concluded that the current funding landscape, though competitive, offers incredible opportunities for prepared and self-aware founders. The goal is no longer just to raise capital, but to raise strategic, aligned capital that accelerates Maryland's growth trajectory, and to do that, the panel provided three actions for those seeking VC funding.
- Organize your house: Ensure your financials, taxes, and P&L statements are immaculately organized.
- Seek wisdom: Proactively identify skill gaps and recruit mentors or fractional experts to fill them.
- Ask directly for the thesis: Don't guess what an investor wants. Ask target investors for their current investment criteria and mandate to ensure your company is a precise match before pitching.
With these three items, founders, owners and entrepreneurs are more likely to find an opportunity suited for their needs.
Source: Washington Business Journal