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VC Questions for Startups

A Collection of Over 500 Questions by VCs / Investors Before Deciding to Invest in a Startup

Team

  • Is there a great management team?
  • Who are the founders and key team members?
  • What relevant domain experience does the team have?
  • What key additions to the team are needed in the short term?
  • Why is the team uniquely capable to execute the company’s business plan?
  • How many employees does the company have?
  • What motivates the founders?
  • How do you plan to scale the team in the next 12 month
  • Are the founders passionate and determined?
  • Do the founders understand the financials and key metrics of their business?
  • Has the entrepreneur been referred to me by a trusted colleague?
  • Who would be your next hire?
  • Who is “the boss”?
  • How did your team meet?
  • Who in your team does what?
  • What domain expertise do you have?
  • In what ways are you resourceful?
  • How do we know your team will stick together
  • What else have you created together?
  • What’s an impressive thing you have done?
  • Tell us something surprising you have done?
  • What systems have you hacked?
  • Tell us about a tough problem you solved?
  • Do I believe in this team?
  • Is there founder/market alignment?
  • What distinguishes the management team seeking to lead the venture?
  • Who believes in you and how can I get in touch with them?
  • What entrepreneurs do you admire and why?
  • What mistakes have you made thus far in this business and what have you learned?
  • What if three or five years down the road we think you’re not the right person to continue running this company—how will you address that?
  • Have you ever been fired from a job? Tell us about it.
  • Why is your team the best team to back?
  • What skill sets is your team currently missing? How do you plan to fill these?
  • What key positions do you need to fill as you scale the business and to get to the next round of capital raise?
  • Tell me a bit about your background and your co-founder(s)’s background.
  • How do you all know each other?
  • How long have you worked together and in what capacity?
  • Why is your team uniquely motivated to solve this problem?
  • Why did you pick your co-founder?
  • Who do you need to hire during the next 18 months to be successful?
  • When was the last time you had disagreed on a business issue? How did you resolve it?
  • Do the founders have the knowledge to build the technology or would they need outside help?
  • Is there operating experience to measure?
  • Is this an authentic idea that is true to the founders’ passion or a hollow attempt to make money?
  • What are the founders’ unique skillsets to tackle this problem?
  • What is the quality of the previous operating experience?
  • Can the founders work together?
  • Do the founders have complimentary skill sets?
  • Do they have prior experience managing teams?
  • Have the founders hired somebody before?
  • Is the product clear enough to quickly attract talent to work for the company?
  • Is the founder charismatic enough to attract talent?
  • Are the founders candid about the state of business?
  • What is the likelihood of an overhaul of the founding team?
  • Who do you most aspire to be like?
  • Who do you least want to be like?
  • Who are key team members?
  • Any existing board members?
  • What key roles may need to be hired for soon?
  • What experience do you have in this industry?
  • Why are you the right person to bet on to achieve this?
  • Are any of the founders willing to be bought out now?
  • Are there any other people who may claim they are owed or responsible for your ideas?
  • Have any employees or partners left who may challenge these rights?
  • Who in this organization is most replaceable?
  • How is the company currently organized?
  • Who holds which titles?
  • Is there an existing board or advisors?
  • What unique skills and talents does each owner contribute?
  • Name someone you chose not to include as a founder and why?
  • Who filed the company?
  • Who is the registered agent on record?
  • Are there plans to fill gaps in the team?
  • Do the founders get along?
  • Is the team adaptable to change?
  • Are other members of staff on board too?
  • Do you get on with the team?
  • What makes your team suited for this business?
  • How did you come up with this idea?
  • Why don’t you do this yourself? (Meaning, why do you think you need investors?)
  • Are you working full-time on this?
  • How much have you been paying yourself and what is your projected salary?
  • If money and resources were not barriers, what team members would you add?
  • What do you enjoy most about the day-to-day management of the business? What do you enjoy least?
  • What gets you out of bed in the morning?
  • What keeps you up at night?
  • Why do you care about this?
  • How committed are you as founders?
  • What is the value-addition you bring to the table? What do you bring to the business?
  • Where do you see the team in the next 6 - 12 months?

 

Company and Assets

  • How much is your company valued at?
  • How do you define success for you and your company?
  • What positive early traction has the company achieved?
  • How differentiated is the company’s technology?
  • What competitive advantages will there be over existing technology?
  • How easy will it be to replicate the technology?
  • How costly will it be to build the technology into each product?
  • What key intellectual property does the company have (patents, patents pending, copyrights, trade secrets, trademarks, domain names)?
  • What comfort is there that the company’s intellectual property does not violate the rights of a third party?
  • How was the company’s intellectual property developed?
  • Would any prior employers of a team member have a potential claim to the company’s intellectual property?
  • Is the intellectual property properly owned by the company, and have all employees and consultants assigned the intellectual property over to the company?
  • If the intellectual property was developed at a university or through government grants or with open source technology, how does the company have the right to use the technology?
  • Is your legal formation clean and in compliance with applicable laws?
  • What does the company do?
  • What is unique about the company?
  • Where are you headquartered?
  • How big can the company get?
  • Why does your company have high growth potential?
  • What do you understand that others don’t?
  • What, exactly, makes you different from existing options?
  • Have you incorporated, or formed any legal entity (like an LLC) yet?
  • What kind of entity and in what state or country was the entity formed?
  • Will you reincorporate as a US company?
  • What is your hole? weakness?
  • Is there anything else we should know about your company?
  • Would you relocate to X?
  • Where do you see this company going in 5+ years?
  • Do you have a model?
  • What are the key assumptions in your model?
  • What’s your business model?
  • How much and what kind of guidance do you expect from your investors?
  • Can you cite comparable examples?
  • What is your moat?
  • When did you start the company?
  • What are the contingencies?
  • What is your top priority for the next 3-6 months?
  • Is the business model clear?
  • Does the company have to create new tech that may not reach fruition?
  • Who developed the IP?
  • Does the company have a high likelihood of a lawsuit for copyright or patent infringement?
  • Does the company have any outstanding complaints with early employees or founders?
  • Are there regulatory challenges within the sector?
  • Is the company receptive to feedback?
  • What are the governance concerns?
  • Is the company the first mover?
  • Does the company have a competitive advantage?
  • What is the strength of the advantage (network effects, proprietary data sets, etc.)?
  • What was the outcome of other companies in the same market?
  • What is unique about the company?
  • What are your milestones?
  • What pivots have you already made up until now?
  • Is everything in place to make the business model function smoothly?
  • Is the company’s distinctive offering defendable?
  • How healthy is cash flow in the business?
  • If money and resources were not barriers, what are three improvements you would make to your business?
  • What are some of the biggest challenges your business is experiencing?
  • What companies do you most aspire to be like?
  • Who is a potential partner?
  • What types of partnerships have you managed to acquire?
  • What are your biggest weaknesses?
  • What is your business about?
  • What is the actual value being created by the business?
  • Is the value created easy to measure or will it take time to market the ROI?
  • Why does your company have scalability potential?
  • Is the business scalable?

 

Financials and Capital

  • When are you paying me back?
  • Debt or equity?
  • Is the expected valuation for the company realistic?
  • Are the company’s financial projections realistic and interesting?
  • What is the likely exit - IPO or M&A?
  • When do you see the exit happening?
  • Who will be the likely acquirers?
  • How will valuation of an exit be determined given market comparables?
  • How much equity and debt has the company raised; what is the capitalization structure?
  • What future equity or debt financing will be necessary?
  • When will the company get to profitability?
  • How much burn will occur until the company gets to profitability?
  • What are your unit economics?
  • How much is being raised in this round?
  • What is the company’s desired pre-money valuation?
  • Will existing investors participate in the round?
  • What is the planned use of proceeds from this round?
  • What milestones will the financing get you to?
  • What is your burn rate?
  • Have you raised funding?
  • How much equity and debt has the company raised; what is the capitalization structure?
  • How long can you go before funding?
  • How much is your company valued at?
  • Will existing investors participate in the round?
  • What is the planned use of proceeds from this round?
  • What milestones will the financing get you to?
  • Is your ask compatible with what the fund invests in?
  • Does your idea conflict with anything else in the fund's portfolio?
  • Where are you in your fundraise process?
  • What are your valuation expectations?
  • How will your burn rate increase after the round?
  • Walk us through the fully burdened unit economics of your product or service?
  • Are you focused on growth or profitability?
  • How can you reduce your break-even rate point up 6 months in your plan?
  • What are the profit margins/what might the margins be once the company reaches scale?
  • If your equity/salary was based completely on the accuracy of your projections, what would your forecast be?
  • How do you know how much money you need and could you scale your business with less?
  • Describe your revenue model
  • Describe your cost economics. Do you have to spend more to generate more?
  • What does the economics at a unit level look like now and at steady state?
  • What the “rules of thumb” are for margins (gross, unit contribution, EBIDTA) for this sector?
  • What are the key assumptions underlying your medium-term and steady state projections?
  • What are the top three metrics/goals required for you to get to the next round of capital raise?
  • What would your scaled unit economics look like?
  • How much capital have you raised to date? Who all are your investors?
  • What are your revenues going to be this month? What do you think next month’s sales will come in at?
  • What’s the quarter over quarter sales growth rate look like?
  • Let’s look at last month. You had X paying customers, lost X customers…so the churn rate is? (We hate churn, too.) How many customers do you lose a month, as a percentage of total customers?
  • How much money (in convertible notes, etc.) have you already raised?
  • How much revenue have you generated to date?
  • What are your margins?
  • When will your company break even in terms of profitability and cash flow?
  • Who are your current investors?
  • How much are you looking to raise?
  • Have the current terms been set? And if so, what are they?
  • What are your capital costs? (if capital intensive, like hardware / e-commerce)
  • Have you secured a lead investor for the round? If so, who and how much is the lead investing?
  • Do the unit economics work?
  • How much money does the company have in order to meet its goals?
  • Is the financing risk manageable given the risk?
  • How long until your business can become self sustaining?
  • Is the valuation and structure of the raise in line with other comparable things we have seen in the market?
  • Can we provide the needed capital?
  • Can this generate meaningful returns to our investors?
  • If the company is thinking M&A, when or what stage would this likely occur?
  • Does the company have a relationship with any potential acquirers?
  • How much equity and debt has been raised in the past?
  • Who participated in earlier rounds of fundraising?
  • What stock options have been given already? What is the distribution of equity between founders?
  • How will these funds be allocated?
  • How much will be spent on founders’ salaries?
  • How much will be spent on overhead versus expansion?
  • What if you don’t get all the money you are asking for?
  • What assets will be invested in with this capital?
  • Why are you choosing this method of raising capital?
  • How much of this money will be used for future fundraising efforts?
  • How much are your personal expenses each month
  • What profit margins are you operating on?
  • How will scaling impact profit margins?
  • Who handles accounting?
  • Who do you imagine will help you exit?
  • When do you expect you will be conducting a follow up round of fundraising?
  • What other capital requirements does the business have?
  • How will you make money for your investors?
  • Who are your investors so far?
  • Could you grow faster with more money?
  • Can you tell me what other investors have committed or expressed interest?
  • Have you invested your own money? If not, why not?
  • If it is acquisition, who are likely acquirers? What acquisitions have they made recently? Of what kinds of companies? At what multiples?
  • What affects your margins and how do you expect this to change over time?
  • What other means have you used to raise money?
  • What are your revenue projections for 1 year? 3 years? 5 years?
  • What do you see as the biggest risk to my investment?
  • When do you expect you will be conducting a follow-up round of fundraising?
  • What is your overhead?
  • When do you expect to run out of money?
  • How is equity split currently?
  • What is your potential gross margin or profit?
  • How much capital will you need to raise to reach profitability?
  • How large is your ESOP pool?
  • What percentage of the company’s equity do the employees and founders currently own?
  • What ESOP is left?
  • What does the cap table look like? (equity distribution across founders)
  • How are shares split?
  • How big is the option pool?
  • Is the ESOP big enough to keep the common stock holders motivated?
  • Is the ESOP big enough to attract top talent?
  • Please describe the breakdown of the equity ownership in percentages among the founders, employees and any other stockholders.
  • What are the biggest risks to my investment?
  • What are the key risks we need to get comfortable with before making this investment?
  • What are the underlying assumptions to become profitable?
  • What is the likelihood of the underlying assumptions coming true?

 

Risks and Threats

  • Why won’t a huge corporation build something like this?
  • Do you know [insert company]? Why not?
  • What are the potential risks to the business?
  • What do you see as the principal risks to the business?
  • What legal risks do you have? Will the business model comply with applicable laws, including expanding privacy protections?
  • What technology risks do you have?
  • Do you have any regulatory risks?
  • Are there any product liability risks?
  • What steps do you anticipate taking to mitigate such risks?
  • Who are the company’s competitors?
  • What gives your company a competitive advantage?
  • What advantages does your competition have over you?
  • Compared to your competition, how do you compete with respect to price, features, and performance?
  • What are the barriers to entry?
  • What are the factors that limit faster growth?
  • What competition do you fear most?
  • Who might become competitors?
  • Why isn’t someone already doing this?
  • Six months from now, what’s going to be your biggest problem?
  • What’s the worst thing that has happened?
  • What problems/hurdles are you anticipating?
  • How quickly or easily can another team copy your product or service?
  • What are your weaknesses versus competitors? How do you plan to address them?
  • What are your strengths versus competitors? How do you intend to leverage them?
  • Who are you more afraid of: Google or another startup?
  • Who are you most afraid of?
  • What happens if a Google (or equiv) does this?
  • Who are the major players?
  • How strong are the barriers to entry?
  • What are the team plans to attack the barriers to entry?
  • How many competitors are there?
  • How easy is it to replicate their differentiating factor?
  • What is the best-case / worst-case scenario for the company?
  • Are there any showstoppers identified?
  • Where is the competition letting down customers?
  • Why haven’t your competitors done this yet?
  • Do you know comparable numbers for similar businesses?
  • How well do you know your competitors?
  • What prevents others from copying you?
  • What does your complete competitive landscape look like, beyond just where you're playing?
  • What is the barrier to entry for your competitors?

 

Product / Service

  • Why hasn’t this worked before?
  • Why haven’t you gotten traction?
  • Why Is the company’s product great?
  • Why do users care about your product or service?
  • What are the major product milestones?
  • What are the key differentiated features of your product or service?
  • What have you learned from early versions of the product or service?
  • What are the two or three key features you plan to add?
  • How often do you envision enhancing or updating the product or service?
  • Why do users care about your product or service?
  • Provide a demonstration of the product or service.
  • How many users are paying?
  • What’s new about what you make?
  • What do you know about this space/product others don’t know?
  • What are the top things users want?
  • Who would use your product?
  • So what are you working on?
  • Why did you pick this idea to work on?
  • Are you open to changing your idea?
  • Have you considered various mutations of your idea?
  • Who writes code, or does other technical work on your product? Was any of it done by a non-founder?
  • What part of your project are you going to build first?
  • What is the next step with the product evolution?
  • How does your product work in more detail?
  • Where is the rocket science here?
  • Is this product or service exceptional?
  • What are the existing alternatives to your business and why is your solution better especially to the BPL (Below Poverty Line) segment?
  • How will your business tangibly improve the lives of your impact base? Quantify.
  • What does your tech platform look like right now? What’s your database, your web services layer, your secret sauce gluing it all together?
  • What’s the coolest thing about your technology? Like, any embedded AI engines, machine learning algos you’re testing, a patent?
  • How are you updating your code? Is one of your cofounders a developer? (Do you want some help sourcing a technical co-founder?)
  • What is the specific problem you are solving?
  • How big / serious of a problem is it?
  • Why is this a problem?
  • Who has this problem?
  • How are people solving this problem today?
  • Describe your solution to this problem.
  • What effort / timing is required to switch from a different solution to yours?
  • (For deeptech) What is unique about the tech? (Do you have any patents / IP / trademarks?)
  • What is your product roadmap for the next 6-12 months?
  • How much does your solution/product cost (COGs)?
  • How much will it cost in the future?
  • Why do people buy / use your solution?
  • Minimum batch sizes / inventory / etc?
  • Is the product nice to have or is it a must have?
  • Is the product better, cheaper, or faster than existing solutions?
  • If it is better, how is it better?
  • Can the product scale domestically and/or globally?
  • How much progress has been made towards product development?
  • What is the likeliness that people will use this product?
  • Is the product patented or defensible (network effects, vitality, other moats)?
  • How differentiated is the product from other available options in the market?
  • Is the proposed product timeline realistic and can it be executed in the proposed timeframe?
  • Is the company building on top of other platforms?
  • What is their relationship with the platform they are building on top of?
  • Are there product plans in the direct path of the platform or is it complementary?
  • Are there any additional patents pending or planned?
  • What unique features are you working on?
  • What other streams of revenue can be added to this?
  • How well has the product or service been received so far?
  • What’s proprietary? What are you going to do to defend that?
  • How strong is your patent?
  • Have you protected your Intellectual Properties like Patents?
  • What is the platform you are going to use? Physical retail? Ecommerce? A mix of both?
  • What is the typical onboarding time for the client?
  • What are the next things you want to build out? Why?
  • What will your product look five years from now?
  • Tell us about your MVP (minimum viable product)
  • How solid and scalable is your technology?

 

Market

  • How big is the market opportunity?
  • What percentage of the market do you plan to get over what period of time?
  • What is the projected lifetime value of a customer?
  • What is the typical sales cycle between initial customer contact and closing of a sale?
  • What early traction has the company gotten (sales, traffic to the company’s website, app downloads, etc., as relevant).
  • What has been the principal reasons for the early traction?
  • What do you understand about your users?
  • Who is going to be your first paying customer?
  • How do you know customers need what you are building?
  • What makes new users try you?
  • Why do the reluctant ones hold back?
  • Where do new users come from?
  • How many users do you have?
  • What is your user growth rate?
  • What is your growth like?
  • What’s the conversion rate?
  • How much does customer acquisition cost?
  • Who needs what you’re making?
  • How much money could you make per year?
  • How do you know customers need what you’re making?
  • What has surprised you about user behaviour?
  • Are there any obvious obstacles to succeeding in this market?
  • What are the risks, opportunities, and anticipated growth potential?
  • What KPI are you focused on?
  • If you could pick only one non-financial metric to measure the success of the business, what would it be?
  • What are the key drivers of growth?
  • How many customers do you need to break even?
  • How quickly are revenues growing? What is fuelling that? What are the bottlenecks?
  • How do your customers think about ROI on their spend on your product/service, and what kind of ROI do they typically see?
  • Can you tell me a story about a customer using your product?
  • What will your market look like in five years as a result of using your product or service?
  • Who is your customer?
  • What have you learnt about customer demand for your product or service?
  • What progress (in numbers) have you made so far? Why is it interesting?
  • Explain your short-term, medium-term and long-term differentiators.
  • Taking a look at lead generation: how many potential customers contact you in a month? (Top of the funnel)
  • What percentage of your revenue is your largest customer? (Risk spotting)
  • For every 10 leads you get, how many actually sign up and pay you money? (Conversion rate)
  • What does your marketing stack look like right now? (Here’s more information on how we think of early scaling, sales, and marketing hires.)
  • Why now?
  • How much money are people spending to solve this?
  • Who is your customer persona?
  • Who is the end user?
  • Who is the buyer?
  • What does a day-in-a-life look like for these people?
  • How much are people paying today? (range?)
  • How much do you think you can charge in the future?
  • How much does it cost you currently to get a user? And in which channel?
  • What is the sales cycle to-date?
  • How does the product team interact with current and potential customers? If so, how and how often?
  • Any notable customers?
  • Any enterprise customers paying big money?
  • What does retention or churn look like? (if you know)
  • What does engagement look like?
  • Any upsells?
  • Is the market large enough for the company to capture a small portion and still make our investment attractive?
  • What are the megatrends over the past 24 months?
  • What is the momentum of the market?
  • Is there a shift in consumer behavior?
  • Are there strong competitors in the market?
  • Are customer contracts prepaid or not?
  • What is customer engagement and churn?
  • Customer testimonials?
  • Will target customers be able and willing to pay healthy price for product?
  • Is the timing right and why?
  • Have other similar companies been formed before?
  • If yes, why did they fail?
  • What is the churn?
  • What are the customer’s asking for as an addition to the existing product?
  • Who is the target customer and what is their likelihood of staying open?
  • What are the trailing top line growth rates?
  • What are the projected growth rates over the next 24 months?
  • Who is the largest customer?
  • What is the relationship with the largest customer; are they pleased with the product?
  • Can the largest customer influence pricing, product roadmap, etc.?
  • Suppose we are sitting here in five years, and I show you a report detailing adoption in your field. What is the expected rate of adoption?
  • What would have to happen in order to reach this level of adoption?
  • Who exactly is your best customer?
  • How much feedback have you received so far?
  • How many actual users do you have?
  • How long do users stay on average?
  • How many actual sales have you made?
  • What is the annual growth rate?
  • Total rate of growth?
  • Has growth been linear and consistent?
  • What has held back your growth?
  • How much is your marketing budget?
  • What’s the market context?
  • Is the lifetime value of customers significantly greater than the cost of acquiring them?
  • Are there any holes in the company’s market expectations?
  • Is there a genuine need for this new product or service I’m investing in?
  • Do you realize you’re vastly underestimating your marketing expenses (or sales expense, or margins through channels, or headcount required for direct selling)?
  • Have you actually talked to those companies?
  • Who else is interested?
  • Who else have you shown this to?
  • Why does your company have high growth potential?
  • How big is your addressable market and how did you determine that?
  • Do you have any contracts/lock-ins with any partner/collaborator?
  • Exclusivity contract?
  • What does the customer journey look like? How would you change it?
  • Has growth been consistent or attributed to some event?
  • What is your retention like?
  • What is the market and revenue potential for the company and the sector as a whole?
  • Are there metrics to show that customers value the solution to the problem?

 

Key Metrics and Strategies

  • What is your plan to grow?
  • How did you arrive at the sales of your industry and its growth rate?
  • How does the company market or plan to market its products or services?
  • What is the company’s PR strategy?
  • What is the company’s social media strategy?
  • What is the cost of a customer acquisition?
  • What advertising will you be doing?
  • How can the early traction be accelerated?
  • What are the key metrics that the management team focuses on?
  • What resistance will customers have to trying you and how will you overcome it?
  • How are you meeting customers?
  • How are you understanding customer needs?
  • How will customers and/or users find out about you?
  • What is your distribution strategy?
  • If your startup succeeds, what additional areas might you be able to expand into?
  • What are you going to do next?
  • Who is the customer base, how are the customers acquired, and what is done to retain them?
  • What do you do if your top line expectations do not match expectations?
  • What’s your price point, and what’s your pricing methodology, and why did you settle on both of these?
  • How do you track trends in your market?
  • How will your impact scale?
  • How are you automating lead generation and conversion, or how would you like to? The essence of what we’re trying to learn is, what have you learned about what it takes to close new revenue in your market?
  • How are you currently getting users / customers? (what customer acq channel(s)?)
  • How do you think you will get users / customers in the future?
  • What are the plans to retain customers?
  • What are the plans to tackle growth?
  • Do hiring decisions mirror growth plan?
  • How do you come up with these figures?
  • What changes have you made based on that feedback?
  • How are you marketing your product or services?
  • Which specific marketing channels are you using?
  • Why are you using these marketing channels?
  • What is your plan B if these sales channels are interrupted?
  • How fast can you grow your business? Can you scale up volume without proportional scaling up headcount?
  • What milestones have you met?
  • How are you going to close sales?
  • How are you going to get started?
  • How do you plan to manage the shift from a small business to a scalable company?
  • How much demand can you currently handle and what would it take to scale up?
  • If you raised more money, could you grow faster? Why? How?
  • What is your Business Growth Strategy?
  • What is the customization you bring to the brand?
  • How do you keep up with market trends?
  • What are your KPIs (Key Performance Indicators)
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