investor questions

By Oran Yehiel · Published September 18, 2022

Founders should prepare to pitch a business idea and be ready to answer relevant investor questions.

If you fail in these areas, it is unlikely for you to obtain funding sources.

Below you can see some key questions investors ask during your meeting. 

All founders need an understanding of this information.

The Core Elements Of Every Investor Meeting

When seeking investment for a startup, founders should be ready to answer questions about the core elements of their business.

The most crucial aspect for investors is the team.

They will want to know if the founders are trustworthy and capable of executing their plans and if they have relevant experience.

The market size is also essential; investors will want to know if there is potential for high returns on their investment.

They will also assess the product, looking for evidence of a product-market fit and assessing the level of innovation.

Finally, financials are crucial; investors will want to see that the founders understand their numbers and are in control of their finances.

By being prepared to answer questions about these core elements, founders can increase their chances of securing investment.

Investor Questions about: TEAM

  1. 1
    What is the founder's background?
  2. 2
    What unique skills and talents does each founder contribute?
  3. 3
    What are the roles and responsibilities of each founder?
  4. 4
    Do you have any prior experience in this field?
  5. 5
    Did the founders work together in the past?
  6. 6
    Does anybody with startup experience?
  7. 7
    Who are key team members?
  8. 8
    Where are your offices?
  9. 9
    How many employees do you have?
  10. 10
    Are there any board members or notable advisors?
  11. 11
    What additional roles do you foresee that might be necessary for the foreseeable future?
  12. 12
    What makes you the right person to lead this startup?
  13. 13
    What keeps you motivated as a founder?
  14. 14
    Are any of the founders thinking of retiring soon?
  15. 15
    Is there a reverse vesting agreement between the founders?
  16. 16
    Do you have a non-compete agreement with your current/previous employers?
  17. 17
    What are the biggest challenges that your team is facing right now?
  18. 18
    Can you share your Org Chart?
  19. 19
    Who are your contractors?
  20. 20
    Which consultants do you use?
  21. 21
    Are any of the founders related?
  22. 22
    Do any of the founders have side projects?
  23. 23
    What other companies or organizations do you have a role in?
  24. 24
    Do you have any personal guarantees on debts
  25. 25
    Who in this organization is most replaceable?

Investor Questions About: MARKET

General

  1. 26
    What is your total addressable market (TAM)?
  2. 27
    What is your serviceable available market (SAM)?
  3. 28
    What is your serviceable obtainable market (SOM)?
  4. 29
    What market share would you like to achieve?
  5. 30
    Who is your ideal customer?
  6. 31
    How do you plan to penetrate your target market?
  7. 32
    How long would it take to gain a significant market share?
  8. 33
    Why is this the right time for this product or service?
  9. 34
    What are the main trends affecting your industry?

Competition

  1. 35
    How many competitors do you have?
  2. 36
    What is the competitive landscape?
  3. 37
    Name the 3 most significant competitors
  4. 38
    What differentiate you from your competitors?
  5. 39
    What are the drawbacks or hurdles you are facing?
  6. 40
    Do you have any economy moats or barriers to entry?
  7. 41
    Where does the competition fail?
  8. 42
    Is your market share bigger than your competitors?
  9. 43
    Is your pricing model different?
  10. 44
    What are the critical success factors in this industry?

Business Model

  1. 45
    What are the main KPIs your team is measuring?
  2. 46
    Which specific marketing channels are you using?
  3. 47
    Why are you using these marketing channels?
  4. 48
    How are you marketing your product or services?
  5. 49
    What are your primary marketing activities?
  6. 50
    What is your go-to-market strategy?
  7. 51
    How long will it take you to break even?
  8. 52
    What is your plan B if these sales channels are interrupted?
  9. 53
    What profit margins are you operating on?
  10. 54
    How will scale impact profit margins?
  11. 55
    What pivots have you already made up until now?
  12. 56
    What other streams of revenue can be added to your business?

Customers

  1. 57
    How many paying customers do you have?
  2. 58
    What is your CAC (Customer Acquisition Costs)?
  3. 59
    What is your LTV? (customer lifetime value)
  4. 60
    What is your revenue model?
  5. 61
    How do you measure growth?
  6. 62
    How much did you grow in the past 12 months?
  7. 63
    How much did you grow in the last quarter?
  8. 64
    What are the 3 main reasons that hold your growth even faster?
  9. 65
    Do you have a demo to present?
  10. 66
    What is your retention rate?
  11. 67
    What is the typical feedback you get from customers?
  12. 68
    Did you consider the feedback? If so, in what way?
  13. 69
    Do you have any viral growth components in place?
  14. 70
    Did you get any media coverage? By whom? 
  15. 71
    Do you have any testimonials or reviews from customers?
  16. 72
    Do you offer a free trial?

Investor Questions About: PRODUCT

  1. 73
    Why is your product unique?
  2. 74
    What pain does it solve?
  3. 75
    What is the development status of your product?
  4. 76
    Is it ready for launch?
  5. 77
    What are the next steps in terms of development?
  6. 78
    What is the roadmap for your product?
  7. 79
    What is your product development process?
  8. 80
    What features are currently available?
  9. 81
    Are there any inherent legal exposures while using the product?
  10. 82
    Are there any potential risks to customers?
  11. 83
    Do you need to comply with specific regulations?
  12. 84
    Did you file for patents? What is the current status?
  13. 85
    Who is your IP attorney?
  14. 86
    Who is the owner of your IP?
  15. 87
    Are there any prior employees or founders who may challenge these rights?
  16. 88
    Any future patent filing plan?
  17. 89
    Did you sign any former employee or contractor on the IP Right Transfer agreement?
  18. 90
    What unique features are you working on?

Investor Questions About: FINANCIALS

Company Incorporation

  1. 91
    What is the company's incorporation structure?
  2. 92
    Where was the company incorporated?
  3. 93
    Do you have any subsidiaries?
  4. 94
    In which countries do you operate?
  5. 95
    Do you have any employees there?
  6. 96
    Who are the key shareholders?
  7. 97
    What are the current holdings of the founders?
  8. 98
    Are there existing board members or advisors?
  9. 99
    Who handles your accounting and payroll?
  10. 100
    Who is your auditor?
  11. 101
    Who handles your legal matters?

Fundraising Round

  1. 102
    Who participated in earlier rounds? any lead investors?
  2. 103
    How much equity and debt was raised so far?
  3. 104
    What is the round's pre-money valuation?
  4. 105
    how did you get to this number?
  5. 106
    How much would you like to raise?
  6. 107
    How did you get to this number?
  7. 108
    What is your current burn rate?
  8. 109
    What is your current financial runway?
  9. 110
    What was the previous pre-money valuation? when was it?
  10. 111
    What was your previous investment amount?
  11. 112
    What is your exit strategy?
  12. 113
    What is the expected timeline for the exit?
  13. 114
    Will current investors take part in this round?
  14. 115
    What do you expect from your investors?
  15. 116
    What other offers have you received?
  16. 117
    What are the terms of those offers?
  17. 118
    What is the expected time frame to close this round?
  18. 119
    Who else have you spoken to about this deal?
  19. 120
    When will they make a decision?
  20. 121
    Have you ever done dilutive financing round before?
  21. 122
    What was the reaction of your shareholders to that event?
  22. 123
    Can you introduce me to your lead investor?
  23. 124
    Do you have an ESOP in place?
  24. 125
    What is the current pool percentage out of the total number of shares?

Use of Proceeds

  1. 126
    How are you going to use the round funds?
  2. 127
    How will this round extend your current runway?
  3. 128
    What is the next big goal you plan to achieve?
  4. 129
    Do you plan any salary raises?
  5. 130
    What is the budget breakdown between R&D, S&M, and G&A?
  6. 131
    Do you have a plan B in case you won't succeed raising the full amount?
  7. 132
    Do you plan any CAPEX investments?
  8. 133
    Did you try other forms of financing?
  9. 134
    Did you raise funding from F&F?
  10. 135
    Did you put your own money into the company?
  11. 136
    Do you use investment bankers? finders?
  12. 137
    Is there anything else you would like to share with us?

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