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Cheat Sheet of Top 20 Questions Asked by Investors at a Startup Meet

Posted on Feb 20, 2018

Are you a startups looking to raise money in Venture Capital meeting? Don’t let the investors throw you a curve ball. Here is a cheat sheet of top 20 questions you should have answers to.

These 20 Questions Can Help You Make a Great Pitch

At a recently held closed door seminar at IIT-Bombay’s E-summit, I had the opportunity to witness one of the most electric events held in the campus, famously known as the 10-Minute Million. The room was brimming with an eclectic mix of the brightest minds in the country – from angel investors, to IIT students, to professors to young professionals and entrepreneurs. Just like the popular game show “Shark Tank” that airs on TV channels, this event hosted by the E-Cell has gained a lot of clout among the investing and startup community of India.

“Savvy looking presentations don’t pull wool over our eyes, said one angel investor. ‘We have seen far too many pitches to fall for the fluff ball,’ he smirked.”

As an observer, I was privy to some of the best pitches made here in the presence of a discerning crowd. It was an arena of battle, where the crowd was cheering for the gladiators, who bravely stepped up on the stage to present a 10-minute pitch to the investors, seated in the front row. No sympathies for the entrepreneur who could not stick to the 10-minute deadline. The organizers were brutal when it came to time management which put an added pressure on the young startup founders to make the most of their precious 600 seconds. The winning team could land an investment as high as a whopping Rs. 1.6 million to jumpstart their venture.

The pitches were sharp, swift and deft. But the investors were not easy to please. They were astute business people, looking for their unicorns. Entrepreneurs came and left, failing to make the cut. Only two startups won the hearts of investors, who were happy to part with their money and invest in the dreams of these young entrepreneurs.
At a later discussion with investors, I got to understand that entrepreneurs who haven’t done their homework thoroughly sink faster than a stone. They fail to put themselves in the shoes of the investor, and understand what the investor is really looking for. Savvy looking presentations don’t pull wool over our eyes, said one angel investor. ‘We have seen far too many pitches to fall for the fluff ball,’ he smirked.

So, what are angel investors really looking for? What are their concerns? After attending a couple of startup pitch meets, I have created a cheat sheet of top 20 questions asked by investors. If you plan to make a pitch deck, make sure to prepare your answers. Use these 20 questions as a ready reckoner to ensure that you have no holes left unplugged.

Here are top 20 Questions That Every Investor Wants to Ask Before Signing the Dotted Line:

1. What are the barriers to grow/entry for competitors?

2. Exclusivity contract?

3. What is the value-addition you bring to the table? What do you bring to the business?

4. What is the cost of customer acquisition?

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

6. Is your technology/product patented?

7. What is the cycle-time to close the sale?

8. What legal risks do you have?

9. What is the customization you bring to the brand?

10. Do you have any contracts/ lock-ins with any partner/collaborator?

11. What are your revenue projections for 1 year? 3 years? 5 years?

12. What is the typical onboarding time for the client?

13. Why are you raising the funds you want to raise?

14. What is the platform you are going to use? Physical retail? Ecommerce? Mix of both?

15. What percentage of the market do you plan to get over what period of time?

16. Who are your competitors?

17. What’s your exit strategy?

18. Are you working full-time on this?

19. How do you plan to manage the shift from a small business to a scalable company?

20. What are the key differentiated features of your product or service?

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