A naukri.com initiative
StartupDaily
1M
233
The questions founders should ask startup investors in the first meeting
- Founders should qualify potential investors early and ask appropriate questions to ensure compatibility and mutual investment objectives. This will prevent dead ends and wasted time that often emerges when founders fail to ask the right questions early in their engagement with investors. Some of the key questions asked to investors should include their cheque size range, past investments in startups like theirs, any recent investments, follow-up funding strategy, post-investment involvement expectations, decision-making timeline, and investment vision. Following up effectively and asking for connections if the investor is interested is an excellent way to build a mutual relationship and increase chances of successful fundraising.
- Founders often waste ample time chasing investors that don't fit rather than qualifying them early on. The secret to fundraising success is to ensure that investors' objectives are compatible with yours. In essence, founders have a responsibility to qualify investors politely and efficiently without wasting anyone's time. This sends a positive signal to the investors and positions the founders as astute negotiators.
- Some of the key questions that founders can ask investors early on include the typical cheque size and whether they have invested in companies similar to theirs in the past. It is also wise to ask how they get involved post-investment, their decision-making cycle and timeline, as well as their follow-on funding strategy to ensure compatibility.
- Passive investors are valuable as long as they trust the founder to run the startup, and founders should clarify whether the investor would like to lead or follow the funding round. In addition, founders should inquire about the investor's success vision to determine whether they are aligned for long-term goals.
- Requesting introductions from investors after establishing compatibility is a robust strategy for gaining more relationships, and founders should always make things easier by sending an email for each individual to whom they were introduced.
- Founders should ask tough questions during their initial engagements with investors. Thoughtful questions indicate that they have done their research and are serious about finding the right partner. After a fruitful conversation, founders can also ask if the investor would like to be added to their newsletter; this keeps the investor informed on the startup's progress and strengthens the relationship.
Read Full Article
14 Likes
For uninterrupted reading, download the app