Jun 1, 2015

Questions that Venture Capitalists [VC's] ask STARTUPS

Questions that Venture Capitalists [VC's] ask STARTUPS

Most VC's look in Startups for extraordinary drive, energy, passion, and commitment to take on the tough task of starting a company. If a Startup entrepreneur has to win the hearts of Venture Capitalists they need to be prepared with answers to the following questions.

Remember "VC’s are tough customers. They’ve “seen it all"

About STARTUP
•What does the company do?
•What is unique about the company?
•What big problem does it solve?
•How big is the market opportunity?
•Where are you headquartered?
•How big can the company get?

About FOUNDERS
•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 do you have?
•What motivates the founders?
•How do you plan to scale the team in the next 12 months?

About PRODUCT
•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?
•Provide a demonstration of the product or service.
•What are the two or three key features you plan to add?

About TRACTION
•What early traction has the company gotten (sales, traffic to the company’s website, app downloads, etc., as relevant).
•How can the early traction be accelerated?
•What has been the principal reasons for the early traction?

About MARKET
•What is the actual addressable market?
•What percentage of the market do you plan to get over what period of time?
•How did you arrive at the sales of your industry and its growth rate?
•Why does your company have high growth potential?

About RISKS
•What do you see are the principal risks to the business?
•What legal risks do you have?
•Do you have any regulatory risks?
•Are there any product liability risks?

About Exit Strategy
•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?

 
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