Good Investor Green Flags: How to Recognise Smart Money Before You Sign the Term Sheet

Not all capital is the same.
Some investors accelerate you.
Some drain you.
And a rare few actually build with you — not over you.

Here are the real green flags founders should look for long before the wire hits the bank.


1️⃣ They Ask About CUSTOMERS First

Before valuation.
Before equity.
Before exit.

A good investor starts with:

  • Who uses this?

  • Why do they pay?

  • Why do they stay?

Because real investors love businesses, not optics.

2️⃣ They’re Calm Under Pressure

They don’t panic when you hit:

  • Missed targets

  • Product failures

  • Cash crunch

  • Pivots

If they get jittery early,
they’ll get toxic later.

3️⃣ They Challenge You — Without Crushing You

They ask tough questions.
Offer sharper thinking.
Suggest smarter alternatives.
Push you to level up.

Not to dominate — but to elevate.

4️⃣ They Don’t Micro-Manage

Good investors give:

  • Space

  • Trust

  • Autonomy

They only step in when:

  • Strategy derails

  • Governance collapses

  • Ethics wobble

Silence isn’t neglect —
it’s confidence.

5️⃣ They Tell You the Ugly Truth

They won’t flatter you.
They respect you enough to disagree.

If every meeting feels comfortable,
you’re probably not learning.

6️⃣ They Invest TIME — Not Just MONEY

Good investors:

  • Take calls

  • Answer WhatsApps

  • Read updates

  • Show up in trouble

  • Make real introductions

Capital is abundant.
Attention is rare.

7️⃣ They Respect Founder Psychology

They understand:

  • Pressure

  • Loneliness

  • Burnout

  • Panic

  • Decision fatigue

And they never judge you for being human.

8️⃣ They Protect Your DIGNITY Publicly

They praise you outside.
They critique in private.
They build your authority — not undermine it.

9️⃣ They Care About BUSINESS HEALTH, Not Just EXITS

They ask about:

  • Cash flow

  • Morale

  • Retention

  • Sustainability

  • Profitability

Not only:

  • Exit

  • Return

  • Valuation

Short-term investors build exits.
Long-term investors build institutions.

🔟 They Encourage PROFIT, Not JUST GROWTH

Good investors say:

  • “Fix margins”

  • “Focus on retention”

  • “Preserve cash”

  • “Build defensibility”

Not:

  • “Burn faster”

  • “Outspend competitors”

  • “Chase headlines”

1️⃣1️⃣ They Respect Your VISION — They Don’t Replace It

They add clarity.
They add perspective.
They don’t hijack the company.

Great investors collaborate.
Bad ones colonize.

1️⃣2️⃣ They Are Honest About LIMITS

Good investors openly admit:

  • What they don’t know

  • Where they can’t help

  • When they’re unsure

Honesty > hype.

1️⃣3️⃣ They Play LONG GAMES

They don’t rush:

  • Exits

  • Headlines

  • Vanity metrics

They build:

  • Moats

  • Brands

  • Culture

  • Cash flow

1️⃣4️⃣ They Keep Promises — Big or Small

They:

  • Call when they say they will

  • Follow through

  • Show integrity

Character > capital. Always.

1️⃣5️⃣ They Make You Better

When every conversation leaves you feeling:

  • Clearer

  • Stronger

  • Smarter

  • More grounded

…that’s your investor.


🌱 THE ULTIMATE GREEN FLAG

A great investor doesn’t make you feel lucky to be funded.
They make you feel capable of building.

THE FINAL TEST

If your investor vanished tomorrow… would your company:

  • Still function?

  • Still grow?

  • Still respect you as a leader?

 

If yes — you chose wisely.
If no — you chose dependency.

If you feel we are the right investors for you, reach out to us at team@malpaniventures.com




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