The difference between a good and great pitch?
Asking the right questions.
Here are 11 essential ones entrepreneurs should ask investors:
Are you interested in potentially investing in my company and if so what are the next steps?
• Ask for the investor's interest and clarify the next steps.
• Determine if there is genuine interest or a soft rejection.
•Avoid wasting time with investors who aren't interested.
What is your investment process?
• Understand the process and timeline for making investment decisions.
• Differentiate between individual angel investors, angel groups, micro VCs and VC firms.
• Manage expectations and align your fundraising timeline accordingly.
What is your check size?
• Determine the amount the investor is willing to invest in your company.
• Assess whether their check size aligns with your funding needs.
• Focus your efforts on investors who can contribute significantly to your round.
How many more investments are you planning to make this year?
• Determine if the investor has available funds for new investments.
• Assess whether they are actively investing.
• Avoid wasting time with investors who have fulfilled their investment quota.
Who else needs to be involved to make the decision?
• Identify the decision-makers within the investor's org.
• Ensure you connect with all relevant parties involved in the investment decision.
• Don't rely on others to present your business; meet decision-makers directly.
What is the last company backed, and why?
• Understand the investor's recent investment activity and timing.
• Assess their enthusiasm and level of recent investment activity.
• Gain insights into what factors drove their investment decisions.
Have you invested in a competitor, or are you considering doing so?
• Determine if the investor has any conflicts of interest due to prior or potential investments in competitors.
• Avoid investors who have already invested in companies directly competing with yours.
• Clarify if the investor is merely researching the space or genuinely interested in investing.
What are your concerns about our business?
• Seek feedback and understand potential risks or issues the investor perceives.
• Demonstrate openness to feedback and willingness to address concerns.
• Gain valuable insights to refine your pitch and address investor worries.
What is your follow-on strategy?
• Determine if the investor will provide additional funding
• Are they committed to support your company's growth beyond the initial investment?
• Understand their follow-on investment plan and align it with your long-term fundraising plans.
How do you help companies back?
• Inquire about the investor's value-add beyond financial support.
• Understand their expertise, network, or resources they bring to the table.
• Assess how their support aligns with your specific needs and goals.
Who are some of the founders you backed that I can talk to?
• Request references from founders the investor has supported.
• Evaluate the investor's track record.
• Differentiate between investors with strong recommendations and those with less favorable feedback.
That's a wrap.
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