What are some good questions for a venture capitalist or angel investor to ask an entrepreneur pitching his new start up website?

I usually care about accessing things in only four areas (in order of significance):

  1. MARKET:  is there a market for your product right now?  When if not now?  How big is the market (will be the market)?  Market means paying customers.  Important to understand the last part.  For Google, the market is not people using Google, it's the advertisers putting ads on Google.
  2. PRODUCT:  What is unique about your product?  Why is it hard to copy?  Why is it better?  Why will it spread like wildfire?
  3. TEAM: Who are you guys?  Have you done startups before?  Is there a balance between business (less important) and technology (more important)?
  4. DEAL: How much money do you want and how long will it last?  When will we have another conversation about financing and what should I expect to see accomplished when we have this conversation?

Really, market is #1, product a close #2 — either it's market innovation or product innovation.
Be prepared to answer the standard:  Why now?  Why us?  What will the investor get for their money?  When will it happen?

2 Replies to “What are some good questions for a venture capitalist or angel investor to ask an entrepreneur pitching his new start up website?”

  1. Although the question included "The more questions, the better", I think it's interesting to think what would be the ONE (and only one) question you would ask an entrepreneur.
    In my opinion it would be: "What is your salary going to be now, and how will it change going forward ?".
    I think that you can learn a real lot from the reply.
    1. The burn rate of a start up is usually primarily HR related. The entrepreneur's salary will effect the standard for the organization. Going forward this will be important.
    2. A founder after raising money needs to dance the line between being an employee at his company and being a major shareholder. From the reply you can learn on what his perception in this regard. Is the reply based on what her previous salary was, or is it based on the assumption that the real compensation will be from equity.
    3. Start-ups are (almost) all about people. From my experience, the response and dialog that follows this inquiry will allow to learn a lot about the founder on many levels. His background, her perception about herself, personal commitments and conflicts etc.

  2. Most common
    1) Can you show me a protoype?
    2) How do you plan to get users?
    3) How many users do you have?
    4) Do your users return?
    5) How do you plan to monetize your users?
    6) Do you have a technical co founder?
    7) What is your market?
    8) Who are your competitors?
    9) How much money do you need?
    10)  Why are you the best team to do this?

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