37 questions investors might ask about your startup
Monday, October 12, 2015

37 questions investors might ask about your startup

If you’re planning on talking to potential investors and wondering what kinds of questions they might ask you about your startup, here are 37 likely one. Disclaimer – this is not a comprehensive list. If there is a question you think I should add, please send it my way.

The Market

  1. What is the target market?
  2. How many customers exist in the target market?
  3. What is the average annual value of a customer?
  4. What is the total market size (market cap)?
  5. How accessible is it?
  6. How fast is it growing? (rapid growth is 30% or more per year)
  7. How durable is the market? (Will product / service be in demand 10-years from now?)

The Concept (Product / Service)

  1. Do customers place a high value on product / service (Is it something customers can’t do without?)
  2. Does the service meet a strong demand?
  3. Is the concept focused and easy to explain?
  4. Will the concept provide a highly superior product / service that is not radical?
  5. Does the concept provide multiple expanding or spin off opportunities?
  6. Are there barriers to acceptance that need to be overcome?

The Team

  1. How qualified are the founders?
  2. Are the key people already part of the business?
  3. Do you know the people you will need going forward?
  4. How hard will it be to attract the people you need?

Opportunities and Threats

  1. Are you the first one doing this?
  2. Is there no single dominant market leader / competitor?
  3. Is there an opportunity to create barriers to entry for future competition?
  4. Will the first company in this business win because of high switching costs?
  5. Will the venture provide high leverage when dealing with customers and vendors?
  6. Are the risks identifiable and controllable?

Financial / Exit

  1. Can the venture reach profitability or cash flow needs quickly?
  2. Is there a high number of potential acquirers?
  3. Is there a potential for a 100M-market cap in 5 years?
  4. Is there a salvage value?
  5. Will the concept be able to raise ongoing funding after a fixed startup investment?
  6. Are there clear milestones to help attract and persuade investors?
  7. Do you know people who might invest?
  8. What are the initial capital requirements?

Founders

  1. Why did you start the business?
  2. What’s your tolerance for risk?
  3. Do you follow-through?
  4. Are you a perfectionist?
  5. Do you have a get it done attitude?
  6. Do you have a sense of urgency?