Always be prepared for you upcoming fundraising meeting

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Preparing for a VC meeting can be like preparing for an interview. You have your story ready and practiced, you can prepare for most of the likely questions, and there is often a curve ball to think on your feet. We have previously shared thoughts on pitch decks and storytelling that may also be helpful preparation. Most questions will fall into some category of team, market, and product; but here are some specific questions VCs might ask.

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Team

Be prepared to talk to your background as a founder (specifically why there is founder-idea fit). You might be questioned on why now is the right time in your career to start the business. There could be some team questions on how the co-founders divide up responsibilities, how you decided to work together, and your plans for building up the team going forward. There also could be some questions on legal structure and cap table.

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Market

There will be questions on the size and market opportunity, why the timing is right, and what market tailwinds may accelerate (or slow) your growth. There will be questions on competition, how you are differentiated, go-to-market strategy, and why what you are building is sustainable.

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Product

In this area, expect to speak on both product and traction. On product showing a demo, providing customer feedback, discussing the roadmap, etc. On traction answering questions on paying customers, business model, financial metrics and projections, IP (if applicable), etc.

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For an earlier stage business, expect more questions on team and market. The further along the business, expect more questions on product and traction. At the end of the day the investor is always trying to figure out what their return potential could be. As a general rule, they are likely doing the math to think if this investment will return their fund (power law application). 

As a bonus, Jason Calacanis’ book Angel has some great questions angel investors should ask.