Here is a list of questions that have been compiled through talking to angel investors, going to pitch events, attending investor meetings, surveying founders, personal experience, internet research, and more. With this list, one should be prepared to answer just about any question an investor will have in the initial meeting. likewise, this list is one that investors can use as ammo to find out if they will want to move forward with the company at hand. If there are any questions that might be of importance that were left out, please email me as this list will be updated in future editions.
ENJOY AND GOOD LUCK WITH YOUR SUCCESSES!
Index:
Questions startup should ask themselves:
First Questions a startup should ask themselves:
What is the most compelling aspect of the company, why do it and why
will it succeed?
● Does this company really need investors?
● How will this company change if others invest in it?
● Does the business model actually make economic sense?
● Will the time and investment you and others make be worth the potential rewards?
● Does the math or financials of the company makes sense?
Questions startup should ask themselves about presenting:
First Questions a startup should ask themselves about presenting:
● Do you have to pay to present?
● How does your business fit within the portfolio of the people you are presenting to?
● What has been the feedback from other companies the person/company/group invested in been?
● Will this be worth your time and money to present verse other things you could be doing?
● Is your company at the right stage to present to these people, is it far enough along to interest them?
● What other value could you get from the presentation such as:
Introductions, knowledge, experience presenting, possible customers, etc?
Questions that might be asked:
● What big problem does the company solve?
● Who is your target customer and why?
● What kinds of groups, people, organizations, geographic locations…
have that problem?
● What percentage of the market do you plan to get?
● How quickly can one scale and what is needed to scale?
● Over what period of time does it take to get the acquired resources to scale?
● What’s the history of the basic idea?
● Why do you do what you do?
● Who believes in you, who is supporting this?
● What mistakes have you made thus far and what have you learned?
● How will you make money?
● How are you going to spend investors’ money?
● Do you have data on competition?
● What’s proprietary?
● How strong is your patent?
● How are you going to do to defend that?
● Where are you headquartered?
● What is unique about the company?
● Who else has seen this business?
● Do you have a working prototype?
● Do you have an MVP?
● What are the key differentiated features?
● What are key features that you plan on adding?
● What gives your company a competitive advantage?
● What are the barriers to entry?
● How did you arrive at the expected growth rate?
General Questions:
● Who are the other founders?
● What are their backgrounds?
● How many employees are there currently?
● What relevant domain experience does the team have?
● What is missing from the current team?
● What additional person or persons would help the company the most?
● Is there anything that is hindering the growth of the company?
● What motivates the founders?
● What motivates the team?
● What is needed to be added to the team in the short term?
● What is needed to be added to the team for the long term?
● How are you planning on scaling the team?
● What are the major milestones that have already been reached?
● What are the next 3, 4, 5, milestones?
● What advantages does your competition have?
● What disadvantages does your competition have?
● Who are your investors so far?
● What is the biggest risk to the company?
● What’s the current runway?
● What are future funding plans?
● What is current growth like?
● How much cash is there in the bank?
● Where did the current funds come from and how long will they last?
● What other ideas have been assessed or discarded?
● What are the company’s weaknesses?
● Who are your advisors?
● How often do you talk to your advisors?
● Why did you choose your advisors?
● What value has your advisors delivered?
● What advisor role is lacking that you wish to fill?
● What is the company’s desired pre-money valuation?
● Is this number flexible?
● How did you come up with your valuations?
● What is your matrix for success?
● What is your matrix for your valuation?
● When will the company get to profitability?
● How much stock is set aside for employees?
● What are the company’s three/five-year projections?
● How is the technology ecosystem going to change in the next 1,3, 5
years in your mind?
● What is the traction?
● What are the reasons for this traction?
● When your initial contacts are used up what will then happen, how will you get new leads?
● What are the steps in acquiring a new customer?
● What does your sales pipeline look like?
● Do you have marketing material, what does that look like?
● Do you have sales materials, what does that look like?
● What is your website address?
● What is limiting growth?
● What is the social media strategy?
● What is your social media channels, number of followers, comments by them?
● What current advertising has been done?
● What is the cost of acquisition per customer?
● What is the current marketing plan?
● What marketing strategies have been tested?
● What has been the feedback from marketing or sales?
● How are you going to generate leads?
● How long is the sales cycle?
● What is limiting sales?
● Who is selling for you?
● How did you arrive at the sales expectations?
● Do you have any stories of a customer using your product?
● Have many people are searching the internet to solve this problem?
● What will this market look like 5 years from now?
● What is the planned use of proceeds from this round?
● What milestones will the financing get you to?
● How much is being planned to be raised next round?
● What future equity or debt financing will be necessary?
● What does success look like for the company?
● What are the founders looking to get from their effort?
Questions to ask about investors:
Questions a founder should ask investors while pitching:
● What are your specific criteria for investing in a company?
● What is your typical check size?
● When do you expect a return on your investment?
● What’s your process like?
● How do you make a decision on which company to invest in?
● Who else do you co-invest with?
● Have you ever removed a CEO from a company before? Why?
● How involved do you wish to be in the business?
● Will you fund additional rounds…if needed?
● How do you interact with founders after investing?
● What are your expectations for the company?
● What are your expectations for the CEO, CTO, CFO…?
● What investments have been done in the past year, two years?
● How do you judge your success as an investor?
● What returns have there been from your previous investments?
One thing for both sides:
Research the Company’s Competitors and know it in-depth. A way to go about the research is to just go through the list of questions above. By filling in as much information as possible you will be in a good
position to understanding the competition and your advantages and disadvantages.
Bonus:
Things to consider:
● Remember to research everyone that might one day be involved and think to yourself, will I be able to work with them in the future? Will I want to work with them? Will we grow or fall apart together?
● If you don’t know an answer to any of the questions above, just admit you don’t know and move forward. Mention how you will get back with the answer. Don’t say something that you are not sure of is true. It will all come out in Due Diligence!!!!
Final Words:
This list of questions was composed of my research. There were many questions I deleted because I felt they were too similar to others and I left some that were alike because I thought they were different
enough to merit both their existence. This list though is comprehensive enough to prepare anyone for even the most thorough integrations.
Good luck and keep us informed on your progress.
Cheers
Shawn Flynn
Check out www.SiliconValleySuccesses.com for videos, interviews, and advice all centered around helping the entrepreneur to fulfill their dream.
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Thankyou for all your efforts that you have put in this. very interesting information.