The Machine or the Optimist? 6 types of investor personalities in deal making

Investor Types

We have onboarded more than 5,000 investors at Vauban, so have experience working with different character types and personality traits when investing in deals. Now, it’s important to note that there is a wide range of investor personality types, however below are some that we have seen frequently and have spent a lot of time working with. We have also included some recommendations on how to pitch your next deal to each of these types of investors. Do you see yourself in the list below...? Or does this remind you of someone?

🤖 The Machine

This investor is super organised, intricate and technical. A perfectionist at home as well as in the office, and has a super-efficient approach to life. Her colleagues are constantly questioning how she does so much, day after day. She sets clear goals with a strict plan on how to meet them, coupled with an uncanny ability to tune out any noise and stay the course.

How to Deal?

Be prompt, accurate and give as much information about the deal as possible at the outset. This investor’s to-do list is never-ending so they will not wait around. As a serial dealmaker, inform them that investing in Deal by Deal SPVs gets easier and easier the more that they do - this should appeal to their sense of efficiency.

❤ The Romantic

This investor goes with what they love despite the potential risks. He makes decisions based on if he can see himself using the start-up’s product or service. These investors can be extremely successful as early-stage investors, where, in the absence of long-term data, a considerable amount of gut-feeling is needed to find the next Amazon or Google.

How to Deal?

Pull on their heartstrings. Repeat the start-up’s story about WHY they are building their company, explain the backgrounds of the Founders, and why these Founders are the right people to solve the problem at hand. Let him know the benefits of investing on a Deal by Deal basis - he gets to handpick the deals that he invests in - no middle man!

👷‍♀️ The Professional

This investor’s air of experience leaves them seemingly cool, calm, and collected in even the tightest fundraising situations. They have set up and invested in many deals, and are familiar with the different parties in an investment, the delays that can crop up, and how to wade through the mountains of data to identify the most important aspects of the deal. If your deal is going smoothly then they can be your best friend, introducing you to other investors and providing valuable feedback and advice; however, if they want something changed, do not be surprised if they become a shark until they get it.

How to Deal?

This investor is a combination of The Machine and The Romantic - you will need to be accurate and forthcoming with data about the start-up, however, they will want to know the story behind why the Founders chose this path rather than pursuing a different endeavour. You will need to promote confidence and be assertive in your discussions, otherwise, they may try to negotiate some favourable terms for themselves and their friends. As a dealmaker, being strong-willed is most important in the first Deal by Deal SPV you do with The Professional, as the same terms will be expected in subsequent investments.

🤫 The Quiet One

Usually, this investor is pretty laid back. They are not overly interested in the technicalities of the deal and give the decision-making to their more experienced friend (usually The Professional). They are usually very successful in their own field and have a great work-life balance, acting as an angel investor as a hobby or if they are particularly interested in a specific start-up. These people are very confident in themselves and their network, and trust their contacts to provide them with great opportunities. They are popular with dealmakers as they are easy to deal with and can provide reliable funding. Dealmakers may find these investors in their inner circle or investment club.

How to Deal?

These investors will be relatively low maintenance, however, don’t take their calm nature as a weakness. They are very smart and understand that professional investors may know more than they do about a specific start-up and want to leverage their relationships to find the best deals. Keep them onside for reliable funding in future Deal by Deal SPVs.

🚀 The Optimist

This investor can make huge Returns on Investments as they are keen to be involved in all opportunities. These investors range from “prophetic genius” to “dazed and confused”. They believe that they can find the next Amazon and are willing to put their money where their mouth is at an early stage.

How to Deal?

Appeal to their fear of missing out - make it clear to them that opportunities, like investing through your SPV, do not come across often. Explain what the start-up is trying to solve and the potential impact on society. They are similar to the Romantic insofar that they rely on the story to get them excited, and the Quiet One as they can be a very reliable source of fundraising.

🤩 The Celebrity

Extroverted, loud, and immersed in the venture community, these investors have experienced some great returns in the past, and aren’t afraid to let you know about it! You can find them very active on social media informing their followers how they were an early investor in [insert household name here]. They enjoy the limelight and discussing new opportunities with whoever will listen. Whilst potentially superficial on the outset, these successful investors can help a fundraise become oversubscribed by announcing their involvement in a deal and promoting it to their network.

How to Deal?

These investors can make a significant difference to budding start-ups trying to increase their brand. Furthermore, if a Celebrity investor agrees to utilise their pro-rata rights in follow-up rounds, this can be a clear sign that the investment is promising and has further to grow. Keep these investors as close as possible as they have great networks and can introduce you to other well-known investors for when you are raising for your next Deal by Deal SPV.

Do any of these sound familiar?

Do you know someone who is The Machine or The Optimist? Or maybe a combination of two. There is no concrete formula to becoming a successful dealmaker, however, if you can identify these nuances in the personalities of your network and adapt your behaviour accordingly, it can be the key to building stronger relationships and raising capital in your next deal.

Ben Morgan