There is very much similarity between a Job Interview and a startup Fundraising Interview. People who have gone through this process can relate to the similarity better and tell you how it is hard to crack start-up fundraising interviews.
When you are looking to raise either seed fund or series A money from angel investors or Venture capitalists, you need to meet as many as possible and answers as many questions hoping for a good valuation of your company so that you can receive as much money as possible. But not in every interaction with Investors or in others words not every interview by Investors would result in positive but after every fundraising interview you will become a better candidate answering their questions. Each time you face an investor you would be asked some new questions from a new perspective, so it is advisable to meet and face start-up fundraising interviews with as many people as possible to hone your skills as an entrepreneur and understand your start-up idea well.
But as like in every job interview, there are some standard questions that are being expected every time to be asked. Similarly, in every startup funding interview, Investors ask some basic questions from startup founders and expect some good, well-researched and logical answers from them. Good answers can lead to some more questions from Investors in order to evaluate the start-up idea and its worth. So it is a must for every startup founder or entrepreneur to prepare and practice some basic questions related to their start-up idea in order to impress the Investor and crack startup fundraising interview to receive funds for their start-up. Remember your weaker answers can spoil hard-earned interview chances with the Investors whereas your stellar answers to every question will draw the attention of people and force investors to take seriously your start-up idea and maybe a chance to receive funds.
Here is a list of some basic questions from Investors in any startup fundraising interview:
- What is your start-up Idea/Business?
It is like on similar lines when interviewers ask you “Introduce Yourself “ in any job interview. The ice breaker of any interview to start with. So expect to introduce your start-up idea in a brief manner in the shortest time possible.
- What is the entry barrier?
This question tries to understand the industry in which you are trying to do business. What kind of barrier you can create for the success of your startup whether it is technology, capital, or some patents.
- Is your idea Imitable? Can anyone copy this start-up idea?
Investors do not want to put their money where there is fierce competition or the startup idea can be easily copy cat. To analyze your startup idea and make some stellar answers which can counter this question.
- Why do you want to raise money?
Now come to the core point “Money matter”. Every Investor will grill you for this question for sure. Now it is up to you how you handle this question smartly whether for seed fund or series A, B, C.
- How raising this much fund will help your start-up?
If you have some numbers in your mind to get from this interview from Investors, keep some backup answers also to justify it. Investors would love to hear how you would be utilizing the raised funds and what will be impacted.
- Do you have any customers?
Every business mission is to serve a customer. So who is your customer or whether your start-up is getting customers? Market size, target customer, repeat customers, are some discussion points in any startup fundraising interview.
- What is your marketing strategy?
How you will reach your target customers? What will be your startup communication message? What tools or channels you will utilize to make your startup audience aware of your startup product/ services? Think over these questions as these questions need some good market research.
- How will this start-up idea generate revenue?
Money attracts more money. Isn’t It? Show Investors how you will make money obviously in millions and convince them to give you money in order to bring more money for them.
- How will you handle the Tech part?
If your start-up idea is of any tech product or some services based on technology, how will you manage technology or any technical issues? Do you have tech expertise? Tech is your core expertise or will you outsource it? This question is basically asked to get an idea about tech dependency?
- What about your team?
What is the academic and professional background of founder/co-founders? How many people are on your team?
Although these are the top 10 basic questions you will be asked from any angel investor or venture capitalist during any startup fundraising, what is more, interesting is that each investor will ask different questions. You can’t be prepared for every question, but even if you get new ones, the more comfortable you become next time while answering the same questions. It is an ongoing process and preparation, practice & perseverance is the key of cracking the start-up fundraising interview & getting a good fundraising achievement. Neither Rome was built in a day nor Amazon succeeded overnight. Remember UBER founder appeared for more than 220 startup fundraising interviews before cracking one.
Are you a startup founder or working on an idea in stealth mode, want to raise startup funds for your venture, Then Prepare for Startup Fundraising Interviews with our Entrepreneurial/Startup Professionals and make yourself ready for the coming startup funding discussion or idea pitching event. Either you make it or break it but don’t lose the opportunity as our mock sessions will help you to understand and analyze your startup idea and prepare good answers to impress the angel investors or Venture Capitalists.