In this capital rich environment, entrepreneurs have the ability to choose their sources of capital. From crowdfunding and angel investments to microfunds there is an abundance of people wanting to get in on early stage financing. For entrepreneurs this is a very good thing. It used to be that anyone who had money was an entrepreneur’s favorite person in the world. Now entrepreneurs have the ability to choose the sources of capital that fund their business. Here are the qualifications entrepreneurs should consider before accepting an institutional investment:

The potential investor is passionate about what you do.
We’ve written a lot about the importance of passionate founders, but it is equally important to have passionate investors. People who are deeply passionate about what they do are steadfast during hard times. In the five to ten years you work with this person, hard times will come. Deeply passionate people are in it for the long haul. A lot of people can write checks, far fewer can see a venture through to the end.

The potential investor has a good reputation.
You will be best served in thinking of your relationship with your investors like a marriage. You should not only like them but other people should value them and be able to tell you why. You should know their history, their track record, their philosophy, their way of looking at the world. You should connect with other companies in their portfolio to see what it is like to work with them once dotted lines are signed. As Avalon’s managing director Brady Bohrmann says, “Reputations are built every second of every day.” Consider seriously the personal references (or lack thereof) for potential investors.

The potential investor advocates for you.
No doubt many of you are familiar with Fred Wilson of AVC. Fred and I go way back and have invested together in several ventures. Fred is an excellent example of a VC who advocates for his portfolio companies. Whether in writing, in conversations with other VCs, or to the person sitting across from them at a cafe, your investors should be openly promoting your company. Investors should be willing to make the necessary phone calls to take you to the next level.

The potential investor believes he or she works for you.
There are two types of VCs, one who thinks they work for the entrepreneur and one who thinks the entrepreneur works for them. The first proves to be a dogmatic partnership that is stress-inducing and inhibits growth. The latter is by far the more effective option. It will also set the tone for the type of engagement you should expect. Investors who believe they work for you will engage at strategic points, not at every possible opportunity.

The Takeaway: People Matter Most.
When you commit to taking institutional money, you’re looking at a long-term commitment, not unlike a marriage. Don’t just look at the figures, look at the people sitting across the table. The people you choose to be at your table will have the greatest impact on the future success of your company. They should be passionate about what you’re doing, have excellent reputations, be an open advocate and understand that their job is to help you do yours.