Investors will never give a single penny before knowing everything about you. They need the information for helping you with the best they can. They also want to understand why and how you came up with the idea of this business or the problem you’re trying to get a solution for. You can have a golden opportunity if you will be able to impress them by answering every question they ask.
You should be very careful while listening to the questions of investors. Know what they are wanting to hear from you. Write down your mistakes so that you can give them corrections later. This will also help you in your future meetings.
Here we are with a list of questions that will help you with a list of questions that might help you understand your weak points because the way you respond will determine the outcome of the entire scenario.
Q1. From where did you get the motivation for establishing this business?
Motivation and passion are the main components behind the success of any startup. Thus, every investor is interested in hearing about the driving forces of each entrepreneur.
Q2. What makes your product unique?
You can only acquire funds if the investor thinks your product is different or superior from whatever is already there in the market.
Q3. Do you have any competitors in this niche?
If yes, who are they? Always remember that you have a competitor/competitors so never say to your investor that you don’t have a competitor in the market. Stay aware of your rivals and take care of how you are going to compete with them with an aim of outrunning them eventually.
Q4. What is your share in the market?
This is an important question, and investors will ask you about your market share because they want to see your company’s potential. They want to know if there is any scope for growth.
Q5. What other means have you used to raise funds?
The purpose of this question is to let the early-stage investors know how much amount you have raised so far and how you have spent it.
Q6. What are some of the biggest challenges your business is facing currently?
Once again, never tell investors that you don’t have a challenge. You need to articulate your strengths and weaknesses as well as demonstrate how you can convert these threats into opportunities.
Q7. What are your business growth strategies?
It is important to have a strong growth plan as your priority should be to achieve sustainable growth for your startup.
Q8. How are your costs?
Investors are interested in the cost of doing your business. These costs include salaries, rent, and marketing, among others.
Q9. How can I help your business?
You will be asked this question because angel investors can offer you much more than your money. They can give you advice, expertise, and connections. Given this, you should let your potential investors know that you are not only looking for funding, but you are also looking for guidance and support.
Q10. What is the problem in the market that you are solving?
You must make sure that your startup is solving a problem in the market. Investors want to invest in a company that makes a difference to customers and adds value.
Q11. Have you protected your intellectual property like a patent?
The purpose of this question is to see if you understand IP and are you prepared to defend your view.
Q12. What do your sales look like?
Give answers that are supported by numbers. However, make sure your data is good.
Q13. Are you participating in any accelerator programs?
Investors are interested to hear your experience as there are many advantages and disadvantages to these programs.
Q14. How do you want to use the XXX amount you are trying to raise now?
Investors are interested in your plan and strategy, how you want to use the money received from them.
Q15. Who is on your team, and what is their background?
Any angel investor would like to associate with a strong team with highly qualified and relevant domain experience who can work together effectively.
Q16. Tell us about the customer acquisition cost?
The reason behind this question is to gauge the future of this startup. They want to know the cost of acquiring customers.
Q17. How is your traction?
Investors will be interested in a startup that has excellent traction. Most of these new businesses quickly die due to slow growth. They want to know how your sales are doing and whether your customer base is declining or growing.
Q18. How committed are you as a founder?
Investors want to know if the founders put their money into the business. They also want to know whether the business owners have other obligations like daily work besides managing this startup. They won’t invest in your startup if they feel any sign of lack of dedication and passion because if you’re not into it, why should they be.
Q19Tell us about your background.
Investors will ask you this because they are interested in knowing your experience and expertise.
Q20. What is your exit strategy?
All investors want to know is how they will get their money back if you decide to close the business. For this reason, they want to hear about your exit plan in case things fail.