Questions Investors and Entrepreneur's Should Ask

Pitch Me---Take My Money

 

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 are able to 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 was left out, please email me as this list will be updated in future editions.

Enjoy and Good luck with your successes!

Table of Contents:

First questions:

General questions:

Questions for Founders to ask about investors:

Bonus:

Final Words:

 

First questions:

Do you have to pay to present your pitch?

Do you have to pay to be have the ability to invest in a company pitching?

How does our business fit within your portfolio?

What is the most compelling aspect of the company?

Does this company really need investors?

General questions:

What big problem does it 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?

Over what period of time?

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?

Who are the other founders?

What are their backgrounds?

How many employees are their 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?

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 advisers?

What is the company’s desired pre-money valuation?

Is this number flexible?

How did you come up with your valuations?

What are your metrics for success?

What are you metrics for your valuation?

When will the company get to profitability?

How much of a stock is set aside for employees?

What are the company’s three/five -year projections?

What is the traction?

What are the reasons for this traction?

When your initial contacts are used up what will then happen?

What are the steps in acquiring a new customer?

What is limiting growth?

What is the social media strategy?

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?

What will this market look 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 raised in this 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 for Founders to ask about investors:

What are your specific criteria for investing in company?

What is your typical bite 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?

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?

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 things 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

1. 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?

1. 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 is was composed from 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 interrogation (ok, since finishing this, I started Part II so keep in touch).  Goodluck and keep us informed on your progress.

Cheers

If you want need help let me know. I provide Consulting for both early stage Founders and Investors.  Cheers

By: Shawn Flynn

[email protected]

Also, want to give a thanks to Nick Moran at the Full Ratchet for entertaining and informing me.  Thank you for helping me along the path of my goal.