Red Flags in early discussions:

1) Request to see a "business plan" (indicates lack of sophistication in early stage tech investing)

2) Talks to much about themselves or their firm (good investors should be 95% about understanding you and your business)

3) Talks negatively about anyone: This is a signal that they're unprofessional.

4) Seems distracted in conversation with you: Any evidence that they don't value your time is a negative signal in that they are either power-tripping or are simply not likely to be helpful.

5) Asks you "dumb questions." This is different in each case but you should feel that they are not asking questions which seem ignorant or reveal a lack of understanding of your business and industry.

Ask for a list of entrepreneur teams and companies they have funded, and google the funding rounds to look for their participation. Usually, legitimate money will be more circumspect than the less professional, and occasionally questionable sources.

Red flags: no recent investments; bad references from previous investees;

Yellow flags: uninspired, superficial qursti